BHP Billiton Close To Sell Shares In Guinea Mine

ArcelorMittal is in talks with Australian mining company BHP Billiton to acquire a stake in a major Guinean iron ore deposit. The deal is valued at $ 500 million and will be completed within a month. BHP has long sought a buyer for its 41.3 percent stake in Mount Nimba, a rich mine on the border with Liberia.

ArcelorMittal has already invested heavily in ore projects in neighboring Liberia, and oversees operations on the Liberian rail line to the Atlantic port of Buchanan. This is the only existing way of delivering ore to export markets in the region. Therefore, any company that would buy BHP's stake in Nimba must reach an agreement with ArcelorMittal on the use of the railroad and try to buy sliding gates . Negotiating access to rail is key to profit from iron ore mining.

For BHP Billiton, the sale of shares in the Nimba mine will accelerate plans to exit West Africa and focus on investments elsewhere in the world. Andrew McKenzie, CEO of ArcelorMittal, sees streamlining the company as one of his top priorities, which includes cutting costs on large and capital intensive projects.

While ArcelorMittal is one of the top contenders right now, when BHP Billiton began negotiating a sale at the end of 2012, Brazilian firm B & Mineração was an early leader. However, lengthy negotiations with a B&A founded by former Vale boss Roger Agnelli fell through earlier this year.