Hi allI found this article very interesting in that BHP, is...

Hi all

I found this article very interesting in that BHP, is worry about the fate of iron-ore miners on the West coast of SA.....BHP thinks that they and Vale should supply the needs of the World with iron-ore.

I think that China might disagree with what BHP is saying, China is looking for a new supply of not only iron-ore but most other commodities Worldwide.

They are feed-up with over paying iron-ore prices from Australia and Brazil, this is where companies like EIO that have ATM 500 million tones of iron-ore so far, there is still more to come from our JORC, to which I can't wait for June next Year....The other thing to consider is that EIO has ONLY DRILL 15% OF OUR LANDHOLDING, SO WHAT WILL THE OTHER 85% OF OUR LANDHOLDING BRING IN????


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25th October 2012


LONDON – BHP Billiton, the world's largest miner, cast doubt on the fate of dozens of West African iron-ore projects on Thursday, arguing Australia and Brazil alone can feed global demand for the steelmaking ingredient.

The remarks come hot on the heels of a decision on Wednesday by Brazil's Vale, the world's top iron-ore miner, to put on hold plans for its $5-billion Simandou project in Guinea, a move analysts have blamed on weaker iron-ore prices and an uncertain political situation in the country.

Though not unexpected given its focus on the $19.5-billion Serra Sul project, in Brazil, and the slow pace of development in Guinea, Vale's decision is a blow for Conakry and for a broader West African region battling to break in to the iron-ore market.

"We believe the production in Brazil and in Australia will be sufficient to meet demand and there is increasing consensus, and a recognition by investors and the market, that this is indeed the case," BHP CE Marius Kloppers told reporters on the sidelines of a shareholder meeting.

"Progressively, you have seen other companies come to a conclusion that is closer to our position."

BHP, whose own iron-ore production is concentrated in Australia's Pilbara region, told Guinea in July that it planned to pull out of its Mount Nimba project there.

Vale itself, battling weaker profit, said on Thursday there were simply too many uncertainties in Guinea and it was reviewing its slice of Simandou, thought to be one of the world's biggest untapped iron-ore deposits.

It took a stake in 2010, for $2.5-billion, entering a partnership with BSG Resources, a group controlled by diamond magnate Beny Steinmetz.

So far, Vale has paid only $500-million. Industry analysts estimate the project could cost more than $10-billion to develop.

A spokesperson for the Guinea government said Conakry had yet to be officially informed about Vale's decision, and said no comment or decision would be made until then.

Vale warned earlier this year that it needed clarity on political issues and compromise to push ahead.

The whole of the Simandou concession initially belonged to Rio Tinto, but in 2008 the Guinean government sold half of the concession to BSGR, arguing Rio had taken too long to develop the deposit, though many analysts questioned the group's ability to develop the asset without a partner.

Rio Tinto declined to comment on Thursday and BSG Resources was not immediately available for comment.

Rio has said it remained committed to its deadline for its Simandou blocks - first shipment in 2015 - though timing is also dependent on the government's approvals and its funding.

POLITICAL RISK

Analysts questioned the timing of Vale's decision but said the move itself was not unexpected, given lower prices, demand for tighter capital allocation from investors, the lack of clarity over Guinean contract reviews and what many say is pressure from the Brazilian government to prioritise domestic projects.

Guinea relies on mineral extraction for 70% of its exports but has dragged its heels on the review.

The Vale BSG project is among those under the microscope. Adding to the plight of the project, an attack by local villagers in July at the Zogota mine, which taps the Simandou deposit, killed at least five people, left behind millions of dollars of damage and prompted Vale to evacuate staff.

"The social unrest at Zogota last month may have expedited Vale's decision. But ultimately it is the project's high up-front costs combined with slow and unpredictable decision making processes on the Guinean government's side that have driven this move," analyst Alexandra Reza at Africa Practice said.

Reza emphasised the tough position for BSGR, left without the partner expected to weigh in with technical expertise.

"This deposit in Africa (Simandou) is one of the last great, quality iron-ore deposits, similar to (Vale's) Carajas in terms of purety," analyst Pedro Galdi at Sao Paulo-based brokerage SLW. "However, there are very significant geopolitical risks, which are prompting Vale to rethink its involvement."

West African projects like Simandou, Belinga in Gabon or Mbalam on the border between Congo and Cameroon, have huge potential, but most face political uncertainty and significant infrastructure hurdles.


http://www.miningweekly.com/article/bhp-questions-west-africas-iron-ore-ambitions-2012-10-25


Good luck to all that hold EIO