The world's largest steelmaker ArcelorMittal has announced the conclusion of a memorandum of understanding (MoU) with Mauritania-based Societe Nationale Industrielle et Miniere (SNIM), one of the oldest iron ore producing companies in Africa, of which ArcelorMittal has been a customer for more than two decades.
Under the terms of the MoU, SNIM and ArcelorMittal are to jointly develop the El Agareb iron ore resource in Mauritania, which is estimated to contain more than one billion mt of high grade magnetite.
In the first phase of the project's development, ArcelorMittal will carry out exploratory works as well as a feasibility study. Further execution of the project will be conducted by a JV company to be established by SNIM and ArcelorMittal.
ArcelorMittal's share at the exploratory and prospecting stage will be 30 percent with an option to increase the stake in question to 70 percent once the project becomes operative. In addition, ArcelorMittal is considering developing 25 million mt of mine per annum, depending on the feasibility study.
Commenting on the MoU, Aditya Mittal, CFO and member of ArcelorMittal's Group Management Board, said, "Mauritania's strategic location in West Africa makes it an ideal choice for iron ore supplies to ArcelorMittal's European steel mills. This large iron ore project would further strengthen our existing presence in the region and will create substantial employment opportunities for the people of Mauritania while accelerating growth in the Mauritanian economy."