Global diversified mining major BHP Billiton has selected B&A Mineração as the preferred bidder for its stake in the Mount Nimba iron ore deposit in Guinea, West Africa.

BHP Billiton owns a 40%-stake in the iron ore venture and recently revealed its plan to divest its asset in Mount Nimba, while also considering cutting back on several iron ore projects in West Africa.

Gold mining company Newmont owns an 40% in the deposit, with France-based Areva possessing the remaining stake.

However, BHP and Newmont are currently buying out Areva’s stake in the venture, leaving both companies with a 50% interest each.

The potential sale of BHP’s interest in the Mount Nimba deposit to B&A Mineração is estimated to cost between $500m and $600m, reported Reuters.

An unnamed source was quoted by Reuters as saying that BHP will commence exclusive negotiations with the bidder to divest the Mount Nimba stake as well as certain small iron ore assets in Liberia.

The Mount Nimba deposit is one of the largest known deposits of iron ore in Guinea and global steel major ArcelorMittal had previously bid for BHP’s stake in the deposit.

The deal, if finalised, will affect Guinea’s president Alpha Condé’s goal to promote Western investment in the country.

A majority of exports from Guinea rely on mineral reserves including bauxite, gold, iron ore and uranium.