Mali frees Resolute executives after $160 million deal, AFP reports
The three executives, including CEO Terry Holohan, were freed from detention on Wednesday.
Billionaire Robert Friedland-backed High Power Exploration (HPX) said on Monday it had raised $200 million for its proposed Nimba iron ore mine in southeastern Guinea, home to some of the world’s highest-grade deposits, including Simandou.
The funds will enable the Canadian company to fast-track the development of the project, which is expected to produce an initial 15 million tonnes of iron ore a year, with exports expected to start by 2025-2026.
The proposed open-pit is located in the Guinean Nimba Mountains, classified as a strict nature reserve in 1944 and then as a World Heritage Site in 1981-82 for being home to globally threatened and endemic species.
The boundary of the reserve and World Heritage Site was modified in 1993 to exclude a keyhole-shaped area to allow mining in the proposed project area.
The modification doesn’t make Nimba’s path to production smooth. HFX will only be able to secure the environmental permits needed to start construction if the World Heritage Committee approves the project.
Nimba is expected to have an initial production of 15 million tonnes of iron ore a year, with exports starting by 2025-2026
There is also an underlying political risk, as resource nationalism has spiked in more than 30 countries over the last year, particularly among key producers of minerals and hydrocarbons.
Mining veteran Friedland has already taken precautions. HFX said on Monday that the World Bank’s insurance arm, known as the Multilateral Investment Guarantee Agency (MIGA), has provided the project with political risk cover.
“The policies will cover political risks which arise in either the Republic of Guinea or the Republic of Liberia in relation to 90% of the equity and principal on the shareholder loans HPX has already invested,” the company said.
MIGA’s protection also covers investments over the development phase and the Guinean and Liberian subsidiaries involved in the Nimba project’s development, HPX noted.
Vancouver-based HPX acquired the iron ore deposit in September 2019. Based on a 2015 report by the United States Geological Survey (USGS), Nimba holds roughly one billion tonnes of high-grade iron ore.
At full-tilt, the mine is expected to churn out 30 million tonnes of high-grade iron ore a year.
Guinea’s most famed iron ore project is the giant Simandou, which Rio Tinto, Vale and billionaire Beny Steinmetz’s BSG Resources fought over for years. However, the West African nation has never exported a tonne, as it lacks infrastructure to transport the ore to local ports.
Guinea hasn’t been able to make money from its iron ore deposits, which remain undeveloped because of protracted legal disputes and the cost of infrastructure
The situation is about to change, as the country inked a deal in October with neighbouring Liberia to allow several Guinean mines, including the Nimba project, to export through Liberian ports.
“Nimba will be the first major iron ore exporter from Guinea,” Guy de Selliers, chairman of the Société des Mines de Fer de Guinée, the entity that owns Nimba, told the Financial Times. “This is the caviar of iron ore,” Selliers said.
HPX is the majority owner of SMFG with an 85% stake. The remaining 15% is held by the government of Guinea.
Friedland made his fortune from the Voisey’s Bay nickel project in Canada in the 1990s. Since then, he has been involved in some of the biggest mineral discoveries in the world, including the giant Oyu Tolgoi copper mine in Mongolia and the Kamoa-Kakula project in Democratic Republic of Congo.
