Junior Miners Tapping into the West African Iron Ore Boom
June 20, 2012 by Gold Editor
SOURCE: [Resource Investing News] - West Africa is on the verge of becoming one of the world’s leading iron ore regions, and junior mining firms feel they could hold the key to the area’s success.
By 2020, West African nations, including Guinea, Sierra Leone, Liberia, and the Republic of the Congo, could supply 250 million tons, or 9 percent of the world’s total iron ore production, according to mining research firm Raw Materials Group.
That’s why both major and junior mining companies have been making big investments in West Africa over the last few years, fueling a mining boom that some think could turn the region into the next Pilbara, the iron ore heartland of Australia.
Big projects are set to start production
Right now, the iron ore market is highly concentrated, with two nations, Brazil and Australia, each accounting for about a third of global exports. Similarly, global iron ore production is dominated by three major mining companies: Rio Tinto (NYSE:RIO,LSE:RIO,ASX:RIO), BHP Billiton (NYSE:BHP,LSE:BLT,ASX:BHP) and Vale (NYSE:VALE).
All three majors are active in West Africa. A landmark project in the region is the massive Simandou development, located in Southeast Guinea. Simandou is a joint venture between Rio Tinto and Chalco, a subsidiary of Chinese state-owned aluminum producer Chinalco. Rio Tinto holds a 50.35 percent stake in the project, and Chalco owns 44.65 percent. International Finance Corporation, the private sector arm of the World Bank, owns the remaining 5 percent.