west africa is the new pilbara - cape lambert

http://www.steelguru.com/raw_material_news/West_Africa_is_the_new_Pilbara_-_Cape_Lambert_Resources/208845.html


West Africa is shaping up as the next Pilbara in terms of the iron ore business according to Mr Tony Sage executive chairperson of ASX listed mineral investment company Cape Lambert Resources.

Cape Lambert?s strategy is to identify and acquire projects it considers promising, and then take them to the feasibility stage before selling them on to other parties for development.

Mr Sage said that ?We don?t do mining. We either sell the project or spin it out. It is a completely different business model to the conventional mining development approach.?

The company is currently working on three iron ore projects in West Africa a region which Mr Sage said had become a battleground between the Chinese and the major Western diversified mining groups.

He said ?You now have the three major iron ore producers Rio Tinto, BHP Billiton and Vale in there plus Xstrata, which is looking to get into the iron ore business.?

He said that ?They are all competing against the four major Chinese mining groups who want to establish iron ore mines in the region, because China is extremely unhappy with the extent of the control exerted over the iron ore market by Rio Tinto, BHP Billiton and Vale. But those three groups still have some 150 years of life left in their operations in Brazil and the Pilbara, so you have to ask the question: why are they spending around USD 30 billion on iron ore assets in West Africa??

According to Mr Sage, the answers are that the mining environment in Australia is becoming less attractive while the resource heavyweights have realized they cannot allow Chinese mining groups to become well established in West Africa. In Australia wage costs are becoming prohibitive while the lack of skilled staff and the introduction of new taxes are all making the country less attractive as a mining destination.

He said that so far a total resource of around 200 billion tonnes of iron ore has been identified in West Africa, of which around 80 billion is JORC compliant. If the Chinese manage to pick up a lot of that, then in 20 years to 25 years they will not be importing iron ore from Western Australia or Brazil.

Mr Sage acknowledged the risks inherent in operating in West Africa, and commented that the key factor for success in the region was access to rail and port infrastructure to be able to export the iron ore. Those projects without an infrastructural solution or which are not close to the coast will struggle.