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Vale Acquires Simandou Iron Ore Assets
05/04/2010 - Vale S.A. has acquired from BSG Resources Ltd. a 51% interest in BSG Resources (Guinea) Ltd., which indirectly holds iron ore concession rights in Simandou South (Zogota) and iron ore exploration permits in Simandou North and Blocks 1 & 2.
Vale S.A. has acquired from BSG Resources Ltd. (BSGR) a 51% interest in BSG Resources (Guinea) Ltd., which indirectly holds iron ore concession rights in Simandou South (Zogota) and iron ore exploration permits in Simandou North and Blocks 1 & 2.
Vale will pay US$2.5 billion in cash, of which US$500 million is payable immediately and the remaining US$2.0 billion in phases based on achieving specific milestones.
Simandou Blocks 1& 2 and Zogota are said to be 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, according to Vale.
Simandou Blocks 1& 2 and Zogota are said to be 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, according to Vale.
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. 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.
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