News24

Gabon renegotiating China mining deal

2012-06-07 21:24

Libreville - Gabon is renegotiating a deal with China for mining rights to the massive Belinga iron ore deposits and may ditch Beijing for another partner, Prime Minister Raymond Ndong Sima said on Thursday.

"The Belinga portfolio is being re-examined because it appears the conditions initially accepted were not entirely satisfactory. Discussions are taking place. They are aimed at improving the launch of this project and they are open," Sima told reporters.

"If they don't reach a satisfactory conclusion, they could lead the state to really relaunch the portfolio but we're not at that point yet. We're at the point of revisiting the text and documents that have been signed in the past."

Gabon is eager to start mining the Belinga reserves, some of the largest untapped deposits in the world with an estimated billion tons of iron ore.

But the government has struggled to find the estimated €3bn it needs to build the infrastructure required, including a hydroelectric dam to provide power, a railroad line of at least 300km and a deep-water port for exports.

Gabon signed a deal in 2006 with Chinese mining consortium Comibel to mine the deposits.

It renegotiated the contract in 2008 after taking sharp criticism over 25-year tax breaks granted to Comibel and concerns from ecologists and other activists that mining the deposits, which sit at the edge of the Ivindo National Park, would be an environmental disaster.

In 2010, the rights were transferred to the state-owned China National Machinery Import and Export Corporation.

There has been speculation that Anglo-Australian mining giant BHP Billiton wants to take over the project. Gabon President Ali Bongo Ondimba visited Australia in April and toured BHP Billiton mining operations there.

In January, a source close to Bongo's cabinet said Gabon had also consulted Brazil's Vale, France's Eramet and other international miners on the project.