Bloomberg reported that Lakshmi Mittal’s ArcelorMittal and Glencore Plc are among potential bidders for Guinea’s Simandou project, the world’s largest untapped iron ore deposit after it was seized from Israeli billionaire Mr Beny Steinmetz in April.

People familiar with its plans said that ArcelorMittal, the world’s biggest steelmaker, has declared an interest in the bidding process for two licenses covering the Simandou project in Guinea, according to four people who asked not to be identified as the talks aren’t public. Glencore is also interested.

Leading mining and steelmaking companies are jostling for a share of the riches contained in Simandou, a remote, iron bearing mountain range, to take advantage of prices for the raw material that have risen about 50% since 2008. Guinea has estimated that Simandou may cost USD 20 billion to develop, largely because it needs a 650 kilometer rail link.

The iron ore position of Glencore pales in comparison with rivals BHP Billiton Limited, Rio Tinto Group and Vale S Still, CEO Mr Ivan Glasenberg has previously expressed reluctance to invest in expensive new mining operations known as greenfield projects. The rail and port component of Simandou has been estimated to cost more than USD 10 billion.

An external spokesman for the government said that the government of Guinea is confident of a strong line up of interested parties in the Simandou concession.

Guinea in April revoked rights to half the Simandou project controlled by a venture between Steinmetz’s BSG Resources Limited and Brazil’s Vale, following claims of bribery and corruption. The decision has sparked legal battles for control of the asset.

BSGR plans international arbitration with Guinea over the seized licenses, it said after being stripped of the asset. Any attempt to negotiate fresh rights to Simandou would be challenged as unlawful.

(Source - www.steelguru.com)