B&A pulls out of talks to buy BHP stake in Guinea iron project

martes 25 de febrero de 2014 11:51 GYT
 

* Companies failed to reach agreement over price

* Initially valued at $500-600 mln, but the value has fallen

* B&A worried about risks of working in Guinea -source

By Silvia Antonioli and Anjuli Davies

LONDON, Feb 25 (Reuters) - Brazilian mining firm B&A Mineração has pulled out of talks to buy BHP Billiton's stake in the Mount Nimba iron ore deposit in Guinea, bank and industry sources said, in the latest sign that projects in riskier countries have become a tough sell.

B&A Mineração lost interest after lengthy negotiations, because it found the project too costly, risky and difficult from an operational and political perspective, the sources said.

Shareholders have been pushing mining companies such as BHP Billiton to focus on cutting costs and delivering returns from existing assets rather spend money on developing large, greenfield projects.

But attempts to sell assets in risky countries are proving increasingly difficult in an environment of weaker metals prices and reduced risk appetite in the mining business.

Questions over Guinea's political stability and whether the government will allow firms to export through neighbouring Liberia, which is vital to making mines profitable at current prices, have complicated investment decisions on its big iron ore projects, including Mount Nimba and the giant Simandou deposit.   Continuación...