Sphere Investment Limited (Sphere), a West African-focused iron ore company, has announced that Gulf Region-based longs producer Qatar Steel has confirmed its purchase of a 15 percent strake and its receipt of board approval to acquire an additional 34.9 percent stake in the Mauritania-based Guelb el Aouj Iron Ore Project. Qatar Steel's agreed investments for a total stake of 49.9 percent in the project amount to $357 million.
The Guelb el Aouj Iron Ore Project is equally owned by Mauritanian state-owned company Societe Nationale Industrielle et Miniere (SNIM) and Sphere.
Earlier this year, SNIM and Sphere had agreed to sell 15 percent of a 49.9 percent stake to Qatar Steel and the remaining 34.9 percent to Saudi Arabian company SABIC for a total of $375 million.
Although, SABIC confirmed only conditional acceptance of its share in the project, requesting additional guarantees for its investments, the company has also stated that it would like to continue its support for the project and the project partners with a long-term offtake agreement.
In addition, for the purpose of iron ore processing, a new operating company will be established, responsible for producing the first seven million metric tons of direct reduction pellets following the completion of the blast furnace shop scheduled for January 2008.