Multi-billion dollar investment programme to create one of world’s largest iron ore projects

BSG Resources Limited (BSGR), Bateman Engineering’s major shareholder, has formed a joint venture with Vale to develop mining rights in Zogota and Simandou Blocks 1 and 2 in the Republic of Guinea. Under these arrangements, Vale acquired 51 % of BSGR Guinea for a total purchase consideration of USD 2.5 billion.

This world class project will ultimately create a low cost, high quality iron ore producer of 50 mtpa, with potential to ramp up production to 75-90 mtpa.

Prior to the formation of the joint venture, BSGR and the Government of Guinea finalised a Base Convention to develop the iron ore deposits at Zogota, in the Simandou South region. As part of the Base Convention, exclusive rights to export iron ore through Liberia have been granted in return for rebuilding the trans-Guinea railway.

Bateman Engineering played an important role in leveraging the full value of this deposit for BSGR, which ultimately led to the signing of the joint venture. As part of the feasibility study, Bateman Engineering was directly responsible for defining and managing the metallurgical testwork along with the design of the iron ore processing plant, the materials handling system at the port and the entire infrastructure surrounding the mine and plant, which includes the power plant and the village accommodation, in order to produce a completely operational facility.

Identification of low cost equipment sourcing via Bateman Beijing Axis (BBA) also contributed to leveraging the project development in terms of cost and reduced delivery periods, creating favourable investment returns.
Bateman Engineering also provided the market intelligence on the required product specifications to assist in the long-term integration of the Zogota and Simandou northern blocks.

In terms of the joint venture, Vale assumes management control and has exclusive off-take and marketing entitlements for all iron ore production from the project. BSGR will continue to play an important role in ensuring the success of the venture and its employees will stay with the joint venture.

The first phase of Vale-BSGR’s iron ore project in Guinea has been approved, with anticipated start up production of 10 mtpa at Zogota in Simandou South and afterwards at Simandou Blocks 1 and 2.
The development will create direct employment of around 5,000 permanent jobs and indirect employment for many more after full commissioning. Vale-BSGR has committed to the Government of Guinea to provide training and development for local employees.

Vale-BSGR will maintain and enhance a significant commitment to local schools, community and sporting projects and infrastructure development.

The venture’s commitment to the Government of Guinea to rebuild the trans-Guinea railway for passenger and light commercial use, initially from Conakry to Kankan, a 600 km route, and later to Kerouane, and the economic and development contribution of Vale-BSGR’s iron ore operations will create a lasting and positive impact across the country for the benefit of the Guinean people.

A Memorandum of Understanding (MoU) has also been signed between the Government of Liberia and BSGR. The MOU describes the framework for further negotiations between the parties to conclude an infrastructure development agreement for the construction of a rail line and port for the export of iron ore from Guinea. This infrastructure development will provide substantial benefits to the Republic of Liberia and its people.

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