* ArcelorMittal, Jonah Capital also among suitors-sources
* BTG, B&A to become financial, logistcs advisor to Conakry
By Clara Ferreira-Marques and Silvia Antonioli
LONDON, Nov 7 A mining venture co-founded by the
former boss of Vale, Roger Agnelli, is among suitors
considering BHP Billiton's slice of the Mount Nimba iron
ore deposit in Guinea, sources familiar with the matter said.
Others eyeing BHP's share of the venture that holds
the Nimba concession include the world's largest steelmaker,
ArcelorMittal, which mines iron ore just over the
border in Liberia, the sources said.
A dealmaker by background, Agnelli is staging a return to
West Africa with billionaire banker Andre Esteves. Two years
ago, Agnelli led Brazilian miner Vale's push into Guinea, taking
a stake in iron ore assets that, controversially, included
blocks of the giant Simandou deposit confiscated by the
government from rival Rio Tinto.
Agnelli, 53, was ousted from Vale last year after a decade
at the helm. Analysts said his plans for a multinational Vale,
did not chime with the Brazilian government's own, more
He is returning to mining and Guinea through B&A Mineracao,
a partnership between his venture AGN Participacoes and
Esteves's investment bank BTG Pactual Group, just
after Vale's new bosses shelved their major commitment in the
Vale's Simandou project, which it was developing with
diamond magnate Beny Steinmetz's BSG Resources, was put on ice
last month. The miner blamed cool demand and opaque regulation.
"The sale (of Nimba) is in a second phase now. B&A,
ArcelorMittal and other suitors have visited the site in Guinea
and Liberia and have made non-biding bids," one source with
knowledge of the situation said. "Later this month the companies
should come out with binding offers."
One of the sources said Jonah Capital, a private investment
company which is a partner of Anglo American subsidiary Kumba
Iron Ore in Liberia, was also among the suitors.
BHP, the world's largest miner, currently owns a stake of
just over 40 percent in the venture behind the Mount Nimba
deposit, as does gold miner Newmont. A third party,
French power plant builder Areva, is being bought out
of the venture, which will leave BHP and Newmont with a 50
percent slice each, one of the sources said.
BHP indicated earlier this year it was pulling out of
Guinea, as projects there and in neighbouring Liberia fell
victim to the global miner's efforts to tighten its portfolio.
It has since said Australia and Brazil will alone be able to
satisfy global demand for iron ore - without recourse to new
producing regions like West Africa.
BHP's exit was a blow for Guinea, which had been courting
investors, and hopes a new mining code - backed by George Soros
- will help clean up the industry and encourage investment.
Investment bank Nomura is managing the sale, which is
expected to include other BHP concessions in Guinea and BHP's
projects in Liberia. One source put the potential value of the
sale at up to $500 to $600 million.
BHP has said it is reviewing its projects in the region, but
declined to comment.
ArcelorMittal, Areva and B&A Mineracao, set up in July with
a $520 million war chest, also declined to comment. Newmont and
Jonah Capital were not immediately available for comment.
Agnelli's fresh foray into Guinea has been seen by some in
the industry as an attempt to eventually take on Vale and take a
slice of Simandou, one of the world's largest untapped iron ore
deposits. Agnelli is already going head to head with Vale at
home, taking a stake in Rio Verde, which mines potash and
phosphate, areas of activity for Vale too.
Simandou, one industry source pointed out, was Agnelli's
"baby": "Is it personal revenge? Absolutely," the source said.
Vale partner BSG, for one, has been ruffled by a potential
advisory role for BTG Pactual with the Guinea government and has
threatened to use "all legal means" to defend its interests.
Others though, said B&A Mineracao had no plans to take on
Simandou, a project which for the Vale-BSG blocks alone could
cost an estimated $10 billion to develop.
"Some have the perception that Agnelli is actively trying to
get a stake in Simandou but I think this is wrong," said the
first source close to the situation. "The focus of B&A right now
is to win the bidding for the Nimba project."
BTG Pactual is expected to be named as a financial advisor
to Conakry while B&A will provide logistics advice, specifically
for the slice of Simandou held by Rio, one source said.
Nimba, an early-stage project , is promising, but as for most
iron ore deposits in the region, miners developing it will need
to overcome a chronic lack of infrastructure. It also faces
environmental scrutiny, given its proximity to a World Heritage
site in the forested south of Guinea.
Any producer would likely need to export through Liberia.
"The logical buyer is ArcelorMittal. This is theirs to
lose," said another source close to the situation, pointing to
existing rail and other infrastructure the steel giant already
operates just over the border from BHP's Nimba.
Arcelor has sought in recent years to cut its dependence on
producers of steel ingredients. It began exporting from the
Yekepa mine on the Liberian side of Nimba last year.
And BHP and ArcelorMittal do have a history - the two sides
held talks two years ago to combine their Guinea and Liberia
assets though negotiations failed. ArcelorMittal, though, is now
wrestling with a heavy debt burden and dire markets.
"Agnelli has money to spend... but for a financial investor,
this is not the easiest asset to start with," one of the sources
close to the situation said.