The West African nation of Guinea, where two of the world’s biggest mining companies are in dispute over an iron-ore project, may withdraw additional licenses covering its mineral riches when it completes a review in April.
“The committee may recommend the withdrawal of agreements for many reasons” Nava Toure, president of the government panel set up to review mineral licenses, said in a Jan. 2 interview in the capital, Conakry. While it’s yet to be decided if further permits will be revoked, “there are actually in certain cases sufficient motives to recommend a withdrawal,” he said, without citing specific companies or licenses.
The prospect of tapping Guinea’s mineral wealth has lured the world’s biggest mining companies including BHP Billiton Ltd. (BHP), Rio Tinto Group and Vale SA. The government last year revoked two licenses held by a venture of Brazil’s Vale and the mining company of Israeli billionaire Beny Steinmetz’s BSG Resources Ltd. covering the Simandou project, the world’s largest undeveloped iron-ore resource.
BSGR has rejected the government’s findings and has filed an arbitration request with the International Centre for Investment Disputes against Guinea.
The review of mining licenses in the country is deterring investors, Mines Minister Kerfalla Yansane said in May. Vale and BSGR had planned a $10 billion operation at Simandou.
Guinea has finished reviewing accords involving Alliance Mining Commodities Guinee, or AMC, and Guinea Alumina Corp.’s bauxite project, Kamsar.
There are at least 14 license reviews to be completed including United Co. Rusal’s Friguia alumina refinery and the joint venture of BHP Billiton and Areva SA at the Nimba iron-ore project, Toure said.
Spokesmen for BHP, Areva and Rusal declined to comment.
Vale and Rio Tinto are in a legal dispute in the U.S. in which Rio alleges Vale and Steinmetz’s BSGR conspired to steal rights to the Simandou project that the government has since revoked. BSGR and Vale have denied any wrongdoing.
BSGR’s arbitration filing last year described the government’s review of its Simandou licenses as “a deeply flawed process based on unreliable and untested evidence.”
Iron ore with 62 percent content delivered to Qingdao, China, rose 0.9 percent to $71.49 a dry metric ton yesterday, the highest since Dec. 5, data from Metal Bulletin Ltd. show.