A subsidiary of Sable Mining, West Africa Exploration (WAE) has signed a deal with Liberia to allow the export of iron ore through the country from its Nimba iron ore project in south-east Guinea.
The company has signed the infrastructure development agreement (IDA) with the Liberian Government for development, ownership rights, financing, and use and operation of rail and port infrastructure in the country.
The 25-year deal will allow Sable to export iron ore from WAE’s Mount Nimba project to the Port of Buchanan.
Sable Mining CEO Andrew Groves said: "The significance of the IDA will be felt across the West African region, as it paves the way for the development of Nimba, which when in production will generate significant revenue, employment opportunities and tax income.
"The spirit of cooperation between these two countries has not only meant a defined development path can be put in place for this strategic asset but also provides a clear signal to other international enterprises that the Mano River Union region is an attractive investment destination."
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The deal allows the company to expand and rehabilitate the existing 30km rail corridor from Yekepato the Port of Buchanan.
As per the deal, Sable Mining will invest $300m in the Mount Nimba project over the next five years and $1bn in the years after.
The company will start rehabilitating the rail line in 2015, in keeping with the use of third-party access rights between Liberia and Arcelor Mittal Liberia, the line operator.
Sable Mining will also build a new section of railway from Guinea to Tokadeh to Yekepa, to join the existing service in Yekepa.
Under the deal, WAE will pay a signature fee of $250,000 while contributing $2.5m a year to a social fund.
WAE will also pay a variable annual concession fee of between $1m to $5m for ore export, along with other taxes.
