Mining Rights to Gabon’s Belinga iron ore Deposit in BHP Billiton’s Hands Soon

In what could be a very favourable push towards its diversification plans, the Belinga iron ore deposit, Gabon's largest iron ore project, is already likely to fall into the hands of Australian mining giant BHP Billiton in February.

Michel Edzang, an official at the Mining Department of Gabon, said in Bloomberg News that government officials from Gabon led by its Mines and Oil Minister Alexandre Barro Chambrier are scheduled to meet in February with executives of Australian mining giant BHP Billiton Ltd., in what could possibly be a final discussion meeting to complete and close the partnership.

BHP Billiton's acquisition of the Belinga iron ore deposit eventually seals its diversification move of producing iron ore away from Western Australian mines. Sales of iron ore supported 29 per cent of the company's $71 billion in sales for 2011.

During initial talks, BHP Billiton told Gabon it might partner with India's Abhijeet Infrastructure Ltd as the Belinga project involves the construction of a railway, Edzang said.

Earlier, the government of Gabon expressed dismay over the status of exploration and development works at the site in the northeast of the country by China Machinery Engineering Corp.

"We're still discussing with the Gabon government on how to solve the problems," Cai Ning, manager of China Machinery's engineering department, said in Bloomberg News, in an apparent admission of the company's work delay on the project.

"We're waiting for their reply. We didn't say we're withdrawing and the project is still ongoing."

In 2010, Gabon initiated a review of the Belinga iron ore deposit after a government consultant noted that the mine's development has been progressing very slow.

China Machinery Engineering Corp acquired the rights to explore the Belinga from as early as September 2006 through a signed initial agreement with federal authorities. It was in 2009 that China Machinery Engineering Corp. finally signed and entered into a 25-year contract to build and oper-ate the mine, located near Gabon's border with the Republic of Congo. The agreement included the construction of a hydropower station, a port and a 500-kilometer (310-mile) railway. China Machinery had said the Belinga iron ore deposit would cost $3.5 billion, with production yield expected at 30 million metric tonnes annually.

But work progress has been slow due to the environmental protests by concerned Gabon residents, claiming the Belinga iron ore deposit is situated right within Gabon's Ivindo National Park, a rainforest home to forest elephants, western lowland gorillas and chimpanzees.

Mr. Cai said China Machinery Engineering Corp. remained in talks with Gabon on the venture.

"The Gabon government didn't fulfill its part, hindering the project and making it unable to move forward," Mr. Cai said. "The truth is, we have been working on the project because the Chinese government gives high priority to this project." BHP Billiton Ltd. is currently developing a manganese mine in Gabon, with first production expected out this quarter.