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01 April 2013 23:47

BHP freezes its mining projects in gabon - sources

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Dashing govt hopes for sizeable investments in manganese and iron ore production.

Top global miner BHP Billiton is freezing all its projects in Gabon, mining ministry sources said on Friday, dashing government hopes for sizeable investments in manganese and iron ore production.

A spokesman for BHP could not immediately be reached for comment.

The company holds licences in the Central African country for the mining of manganese at Mounana, 650 km east of the capital Libreville, and at Okondja, 150 km further to the north.

Government officials had also said BHP signed a contract a year ago for the Belinga iron ore mine, in northeast Gabon, edging out China's Comibel. BHP has declined to comment on this.

"We respect the decision by BHP to freeze its activities in Gabon," said a senior official at the mining ministry who asked not to be identified. "At the same time this is a blow to the country, which hoped to become the world's largest exporter of manganese."

Gabon is the world's second-largest producer of the mineral, an ingredient in making steel, after South Africa.

France's Eramet has been mining manganese at Moanda in southeast Gabon for some 50 years through its Comilog subsidiary.

Another senior ministry official said the decision had not been well received by the government. "This situation is going to jeopardize the agreement signed between the government and the company for the exploitation of iron ore at Belinga."

The two sources said BHP's withdrawal would be officially announced in the coming days. BHP has already closed its office in Libreville.

The Australian miner has also all but pulled out of Guinea, where Brazil's Vale and Rio Tinto have also put their investments on ice amid a government mining sector review and sagging iron ore prices.

BHP's chief executive last year questioned West Africa's iron ore ambitions, saying that Australia and Brazil alone could feed global demand.

The Belinga project, like other iron ore developments in West Africa, has huge potential but faces political uncertainty and significant infrastructure hurdles.

Belinga could provide a significant economic boost for Gabon as the government seeks to expand exports and diversify away from oil, but the project has faced a series of delays and setbacks.

China's CMEC, which had secured rights to Belinga in a 2007 deal, lost the concession following concerns about its environmental impact and the company's ability to deliver.

Topics: BHP Billiton, Gabon, iron ore production, manganese



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