In today's AFR:When you think of the impoverished nations of...

In today's AFR:

When you think of the impoverished nations of West Africa,the words "rampant industralization" don't spring to mind.But if a view that the region is on the brink of a revival proves correct,few companies would be better placed to benefit than those mining iron ore.
In recent years,Africa has imported steal from the Middle East and China to fuel its construction boom.But signals from the governments across the continent indicate a growing desire to build capacity in the material that,along with oil,provides the building blocks for development-steel.
EIO chaired by Ian Burston, is threading a line that few coys have trod b4 in Nigeria.The $24 mil explorer,which recently resumed trading after a share consolidation and raising money at 20c/share, was sitting at 18c on Friday.
EIO is 60% of the way thru its drilling program and will sink core holes at its Agbaja project in Nigeria next week.It hopes to put out a maiden Joint Ore Reserves Committee resource by the beginning of the 3rd Q but if indications are anything to go by,the tiny coy believes it could underpin a 20mil tonne/year export operation from a billion tonne plus resource.
The deposit sits near a 90% completed blast furnace,abandoned by the Russians who started it, alongside a government-owned and currently idle 3.3mil tonne/year beneficiation plant.
The Nigerian govt. is keen to see the furnace fired and has held talks with EIO about supplying the ore to feed it,at market prices.
Perhaps more crucial for an explorer targeting such large volumes,Agbaja is near a rail line to Port Warri. Prelim discussions are under way to secure capacity on the rail, with EIO optimistic that it could snare as much as 20mil tonnes of export capacity.
While the friable nature of the ore means concentrate costs could end up being as low as $50/$60 a tonne free on board,EIO would have to load the ore twice,given Warri can only accomodate Handymax(50,000-60,000 dead weight tonne) ships.
Initial studies indicate that developing the project to 50,000mil tonnes a year could be easier if EIO were to invest in building a 150km spur line to take the ore out thru deep water ports in Benin or Togo that can accomodate Capsize vessels(up to 200,000DWT).
The feasibility study is due out in the 4th Q.If all goes to plan,EIO could see the project thru to devpt, rather than package it up for sale as in previous Burston-led ventures,including Cape Lambert and African Iron.
Sources close to the coy hint that the former Hamersley Iron boss may not want to let go of EIO without a fight,and stress that he has a proven track record in developing as well as selling assets.
However that's not to say that the explorer would not be open to doing a deal-at the right price.