Liberia railway news

[John Ashworth]

Beny’s railway coup

Africa Confidential
Friday 14 May 2010 Vol 51 No 10

The colourful Israeli billionaire Beny Steinmetz has finalised two remarkable deals this year: he has sold 51% of his iron ore mining operations in Guinea to Brazil’s Vale for US$2.5 billion and he has just persuaded the Conakry government to export ore from his Zogota and Simandou concessions in the remote Forestiere region via the Nimba-Buchanan railway in Liberia, which is being rehabilitated by ArcelorMittal.

Steinmetz is due in Monrovia later this month to follow up on a memorandum of understanding with the government allowing him special rights on the Nimba-Buchanan line. Vale announced its $2.5 bn. deal with Steinmetz on 29 April and then promised to invest $8 bn. in Zogota and Blocks 1 and 2 of the Simandou concession; a railway line will link the concessions to the Nimba-Buchanan line in Liberia.

Steinmetz, who was awarded Blocks 1 and 2 in the dying days of the regime of General Lansana Conté, hung on to the rights through the brief regime of Captain Moussa Dadis Camara and into the interim regime of Brigadier Gen. Sékouba Konaté. In both the last two regimes, influential Mines Minister Mahmoud Thiam has ensured that Steinmetz resisted challenges from Rio Tinto, which Thiam accuses of having violated Guinea’s mining codes by failing to develop the Simandou concessions quickly enough. Rio Tinto now has only the option of hauling its material through a Trans-Guinean railway in partnership with the Aluminium Corporation of China (Chinalco).