Glencore finalises Mauritania iron ore infrastructure agreement

Swiss commodities major Glencore has finalised an iron ore infrastructure agreement for its Askaf project in Mauritania with state-owned miner Societe Nationale Industrielle et Miniere (SNIM).

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SNIM and Glencore subsidiary Sphere Minerals confirmed the deal in separate statements late last week.

Under the terms of the agreement, SNIM will provide transport and loading services for ore mined at Askaf.

“This is the first agreement of its kind between SNIM and a foreign investor,” SNIM managing director Mohamed Abdallahi Ould Ouda said. 

He said the agreement shows that SNIM is willing to support foreign investment in Mauritania’s mining sector.

“The service will be for 18 years from the start of production and is based on the internationally accepted depreciated, optimised replacement cost methodology with a take or pay component,” Sphere said.

Glencore approved the 7 million-tpy project in April.

Production is expected to start in early 2017 and it will cost just under $1 billion to get to that stage.

The signing of the infrastructure agreement comes less than a month after Glencore ceo Ivan Glasenberg told investors that the company did not expect to be a ‘big player’ in iron ore.