Mauritania iron-ore miner to dig on despite crisis
miningweekly.com
By: Reuters
Published on 24th November 2008
NOUAKCHOTT - Mauritania's state-owned iron-ore miner will not slow down its investment programme despite the global financial crisis which has slashed prices, the firm's new managing director said.
Societe Nationale Industrielle et Miniere (SNIM) is the world's seventh-largest supplier of iron ore, and accounts for around 40 percent of Mauritania's export earnings.
"I am not sure that in a period of crisis the right strategy would be to stop investing," Ousmane Kane, who took over this month, told Reuters on Saturday.
"We should carry on with investments so when international demand picks up again we can respond to it."
World iron ore prices have fallen more than 60 percent in the last six months as the global financial crisis slows the pace of building and industrial production.
This has forced steelmakers and iron ore miners to cut output, but Kane said SNIM was unaffected so far.
"The crisis has not impacted for the moment on SNIM's day-to-day operations," he said.
The world's three biggest iron ore miners, Vale, Rio Tinto and BHP Billiton, have all cut capacity this quarter.
Within the next two years, SNIM plans to spend $600-million on a new ore enrichment plant at Zouerate, and $150-million on a new port at Nouadibhou, from where most of its output is shipped, Kane said.
Kane, a French-educated Mauritanian who qualified as a mining engineer, began his career at SNIM before working for the African Development Bank and most recently as governor of Mauritania's central bank.
Mauritania's ruling military junta asked Kane to take over at the mining firm earlier this month, after SNIM's former chief resigned to take a job outside the country.
NO FOREIGN PULLOUT
SNIM's foreign partners had shown no sign of wanting to delay or pull out of their Mauritanian projects, Kane said.
Australia's Sphere Investments has a deal with SNIM to develop Guelb el Aouj, a $2,2-billion project, while world No.1 steelmaker ArcelorMittal agreed in January it would develop the El Agareb project, which it estimates to contain 1 billion tonnes of ore.
A third SNIM joint venture, with China's state-owned Minmetals, expects to produce 2,5-million tons at Tazadit-1 by 2010.
"There is no slowing down," Kane said, although he has not yet held meetings with SNIM's partners. "ArcelorMittal is committed to its investments, and those commitments are on track."
Besides falling prices, political risk is also a concern for foreign investors in the Saharan Islamic state after a military coup in August overthrew its first democratic government.
But Kane said he did not believe the political crisis would have an impact on the company's operations.
"SNIM is outside politics, but nevertheless it's a question of finding a consensus to go hand in hand with the efforts SNIM is making to attract investors," he said. |
