Vale Friday announced it has acquired from BSG Resources Ltd. (BSGR), a 51 percent interest on BSG Resources (Guinea) Ltd., which indirectly holds iron ore concession rights in Guinea, in Simandou South (Zogota), and iron ore exploration permits in Simandou North and Blocks 1 & 2. In an all-cash transaction, Vale will pay US$ 2.5 billion, of which US$ 500 million is payable immediately and the remaining US$ 2.0 billion on a phased basis upon achievement of specific milestones.
Simandou Blocks 1& 2 and Zogota are one of the world's best undeveloped sources of high-grade iron ore with potential to support the development of a large-scale long-lived project, with low capex and operating costs.
The joint venture established by Vale and BSGR will implement the Zogota project and conduct a feasibility study for Blocks 1 & 2 with the creation of a logistics corridor for shipment through Liberia. In order to be granted the right to ship through Liberia, the joint venture is committed to renovate 660 km of the Trans-Guinea railway for passenger transportation and light commercial use. Vale will be responsible for management control and marketing of the joint venture with the exclusivity for the off-take for all iron ore produced.
Vale acquires Simandou iron ore assets
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