New book ‘102 Things to Do with a Hole in the Ground‘ spotlights global reclamation projects
Stories of reinvented coal mining regions, regenerated communities and rebuilt ecosystems are told in a new book published this month.
The spot price of iron ore fell further into uncharted territory on Tuesday with the steelmaking raw material declining to the lowest since the inception of the spot pricing system amid a widening supply glut and fresh fears about demand from top consumer China.
The 62% Fe import price including freight and insurance at the Chinese port of Tianjin lost $0.50 or 0.9% to $57.60 a tonne on Tuesday. After almost halving in 2014, the price of iron ore is now down nearly 24% this year.
Tuesday’s peg was the lowest price since November 2008 when The SteelIndex, a unit of Platts, first started tracking the spot price. In 2008, the benchmark contract price was $60.80 a tonne, which was hiked from the annually-set price in 2007 of $36.63.
The slump is not stopping Guinea, home to some of the richest and easily exploitable iron ore fields outside of Australia’s Pilbara region and top producer Vale’s Brazilian home base, to press ahead with the auction of the Simandou north block.
In May last year, the Guinea government and Rio Tinto (LON:RIO) and its partners – China’s Chalco together with the World Bank – inked a game-changing $20 billion deal for the southern section of the Simandou iron deposit which at full production would export up to 95 million tonnes per year for 40 years.
Rio Tinto held the licence for the entire deposit, but was stripped of the northern blocks in 2008 by a former dictator of the country, one of the poorest in Africa. BSG Resources, a company associated with Israeli diamond billionaire Beny Steinmetz acquired that concession later that year after spending $160 million exploring the property.
In 2010 BSGR sold 51% to Vale (NYSE:VALE) for $2.5 billion, but the Rio de Janeiro-based company stopped paying after the first $500 million when the investigation was launched. The Guinea government withdrew the mining permit in April last year, accusing BSGR of obtaining its rights through corruption.
This is a long-term project
The West African nation plans to auction the northern half as soon as April, Guinea’s Minister of Mines Kerfalla Yansane told Reuters on the sidelines of the Chatham House Extractive Industries in Africa conference in London:
“I’m flying to Paris to finalise things with the lawyers and the auction could start as soon as next month,” the minister told Reuters at the Chatham House Extractive Industries in Africa conference.
The minister said he expected many participants would take part given the very high quality of the deposit.
“This is a long-term project,” he said.
Yansane last month said the country has already signed memoranda of understanding with “several large industrial companies” to build the related infrastructure and that the current weakness in the iron ore price is not a concern, because any production is at least five years away.
BSGR is not giving up its claims to the blocks and is contesting any transfer of the assets at the International Centre for Settlement of Investment Disputes. “The tender will not be taken seriously by the market because they are well aware of the contested nature of the assets,” Dag Cramer, a director of BSG Resources, told the WSJ recently.
Further complicating matters Rio Tinto has filed a lawsuit for billions of dollars against both Vale and BSGR for what it called a “steal” of its previously-owned concession. For its part Vale on Friday transferred its stake in the joint venture to BSGR but may still seek to recover from BSGR some of the $1.1 billion it said it lost in Guinea.
Possible bidders include Rio Tinto itself while Vale could even re-enter the fray. World number four miner Glencore, which has no sizeable iron ore assets, has shown interest in high-level talks with Guinea over the northern section.
