Bloomberg News

Senegal to Seek New Iron Ore Partners After ArcelorMittal

November 08, 2012

Senegal will resolve a legal dispute with ArcelorMittal (MT) before negotiating with other companies on developing its iron-ore reserves, the state mining company said.

“We are in the legal process for non-respect of the contract so that they can liberate the concession to another company,” said Birame Diouf, director general of Societe des Mines de Fer du Senegal Oriental, known by its French acronym Miferso, in an interview in the capital of Dakar on Nov. 6. “We await the verdict to start discussions with other companies.”

ArcelorMittal, the world’s largest steelmaker, signed a $2.2 billion deal in 2007 that included building a rail line to the coast and upgrading the port in Dakar, with production scheduled to begin last year. The Luxembourg-based producer suspended the project in 2009 after the world financial crisis. Diouf declined to name companies that may discuss the resource.

Hearings into the resulting dispute were held in September and a decision is due this year or early 2013, ArcelorMittal said by e-mail. “Briefings and hearings as to damages could follow depending on the decision,” the steelmaker said.

Energy and Mines Minister Aly Ngouille Ndiaye said on Nov. 6 he hoped the verdict would be given by the end of the year.

Senegal, in the Court of Arbitration of the International Chamber of Commerce, claims a breach of contract and estimates provisionally damages of $750 million, ArcelorMittal said.

The country’s eastern region has 600 million metric tons of proven iron-ore reserves, Diouf said. Mining projects, including zircon and gold operations, will spur growth of the economy, the second-biggest in the eight-nation West African monetary union, to 4.3 percent this year, the International Monetary Fund says.

Neighbor Guinea is developing iron-ore mines, while Sierra Leone and Liberia began shipments of the steelmaking material last year. ArcelorMittal operates in Liberia, Rio Tinto Group and Vale SA have interests in Guinea and African Minerals Ltd. and London Mining Plc have sites in Sierra Leone.

To contact the reporter on this story: Emily Bowers in Accra at ebowers1@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net


Steve Ballmer, Power Forward
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus