Niron Metals, headed by the former boss of Xstrata Mick Davis, will develop Guinea鈥檚 Zogota iron ore deposit, previously owned by BSG Resources (BSGR).
The news, confirmed via an emailed statement, between Israeli tycoon Beny Steinmetz, BSGR鈥檚 owner, and the government of Guinea over the rights to , one of the world鈥檚 largest untapped reserves of iron ore.
鈥淸BSGR鈥檚 deal] has paved the way for the creation of an effective mining partnership between Niron and the Government to mine this deposit,鈥� it said, 鈥淭he company looks forward to bringing this to fruition subject to the satisfactory settlement of all disputes between the parties.鈥�
As part of that settlement, BSGR has relinquished its claims on blocks 1 and 2 of Simandou, whose development has been hindered by years of legal wrangling as well as the $23 billion cost of the required infrastructure.
The Zogata project is expected to produce around 2 million tonnes of iron ore a year.
Rio Tinto (ASX, LON:RIO), the world鈥檚 second largest iron ore producer, still holds a 45.05% stake in Simandou鈥檚 remaining blocks 3 and 4.
鈥淎t the request of the Republic of Guinea, a new group of investors (presented by and including Steinmetz) will exploit the Zogata deposit, in order to export iron ore, according to an accelerated timetable,鈥� a statement reads.
The Zogata project is expected to produce around 2 million tonnes of iron ore a year, which will be transported by rail and exported via a port in neighbouring Liberia.
Guinea鈥檚 government that ore had to exported via the West African nation鈥檚 own ports.
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Davis is well known in the mining industry. He led Xstrata from a $500 million business in the early part of the last decade to an operation so big that 鈥� at one point 鈥� it made a takeover offer for Anglo American (LON:AAL).
His latest venture, mining fund X2 Resources, ended up losing its backers as it was听听in the three years since launch.