mauritania article

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Intierra spotlight: Mauritania


Tuesday, 15 June 2010

Mauritania is on the west coast of Africa, north of Senegal and south of Morocco. It is lightly populated, only 3.6 million people in a large land mass of more than 1 million square kilometres.

The country won its independence from France in 1960 and, like many other places in Francophone Africa, had a dictator for 20 years.

A new mining law was introduced in 2005 and with some support from the World Bank and the European Union the country has made available basic data on its geology, infrastructure and the location of mineral occurrences and mining activity.

Mauritania has always been known to be resource-rich. Iron ore was first discovered there in 1952 and shipped in 1963 by SNIM, the state-controlled iron ore company.

Iron ore makes up 40% of the countrys exports and 12% of its GDP. Oil was discovered in the country by Woodside in its first overseas foray, but it pulled out in 2006 following a coup.

Since the Mining Act, exploration activity has increased and there are now more than 50 projects in the country and five operating mines. There are 12 foreign companies in the country, including ArcelorMittal and Rio Tinto.

SNIM remains the dominant mining group and now ranks globally as the seventh-largest exporter of iron ore. There are five mines in operation, four owned by foreigners.

Redback Mining, listed on the Toronto Stock Exchange but with Australian heritage, has a 6 million ounce deposit which is producing gold at a cash cost of approximately $A320 an ounce. It commenced production in September 2009.

First Quantum, another Canada-listed group, has a copper-gold project and has recently upgraded its resource.

Australian companies developing projects there are Sphere Minerals, which has made the country its main focus, Shield Mining, Forte Energy, Aura Energy and GCM Resources, all looking for uranium.

Other foreign companies looking to build mines are PT Bumi Resources from Indonesia which is developing another iron ore project.

Among the Australia-listed companies, Sphere Minerals is the most advanced. It has a joint venture with SNIM and has reported a maiden resource of 319 million tonnes of iron ore for its Askaf Iron Ore discovery, a magnetite deposit.

The company raised $33 million in May to advance its iron ore projects there. Shield Mining has also made advances and recently raised another round to develop Tijirit, a polymetallic deposit.

Mauritania is proving to be prospective. Iron will continue to dominate its mineral production for the foreseeable future. Copper and gold are beginning to be produced and the high expectations for uranium remain.

Should you wish to know more about what is happening in Mauritania, or wish to have details on projects that have been reported to the markets, please contact us at Intierra.