Fortescue Metals Group has held talks in Liberia on opportunities in the West African nation, though it disputes a government claim it has already agreed to join a plan to upgrade the nation’s railways — a key step to unlocking iron ore riches in neighbouring Guinea.
FMG chief executive Elizabeth Gaines said yesterday that chairman Andrew Forrest attended meetings in Liberia, including with President George Weah, to discuss philanthropic work “as well as potential future economic and development opportunities”.
Talks were introductory and Fortescue had not entered into any specific commitments, Ms Gaines said.
“Fortescue is not a party to any agreement with the Liberian Government,” she said, adding the producer also did not have any exploration tenements in West Africa.
Liberia said on Monday it had signed a memorandum of understanding with an entity representing Fortescue and Sheikh Ahmed Dalmook Juma al Maktoum of the United Arab Emirates, aimed at upgrading railways and building new lines from the Guinean border to an existing port on the coast.
Guinea has some of the world’s richest iron ore deposits, including the fabled Simandou mine that Rio Tinto, Vale and billionaire Beny Steinmetz have fought over for years, yet the nation has never exported a tonne of the steelmaking material.
One of the major obstacles has been the cost of building a railway to export out of Guinea, rather than using a much shorter route through Liberia.
“The memorandum of understanding, among other things, provides that the investors will upgrade the existing railways in Buchanan for now and will subsequently build new railways from Guinea to the Port of Buchanan without a cost to the government of Liberia,” the country said.
European-based steelmaker ArcelorMittal, which has an iron ore mine in Liberia, operates an existing line from its mine to the Port of Buchanan. ArcelorMittal has said it would let other companies use it, assuming there was spare capacity, or they pay for upgrades.
Plans to expand the rail infrastructure come amid renewed interest in Guinea’s mineral riches.
This year, Steinmetz and Guinea agreed to end their dispute in a deal that’s led mining deal maker Mick Davis to try to develop a project there.
Billionaire investor Robert Friedland is in talks with BHP about taking control of another asset that has sat dormant for years, while Rio is looking at new ways to develop the giant Simandou deposit.