Vale SA has acquired a 51% interest on BSG Resources (Guinea) Ltd, from BSG Resources Ltd, which indirectly holds iron ore concession rights in Guinea, in Simandou South (Zogota), and iron ore exploration permits in Simandou North and Blocks 1 & 2. In an all cash transaction, Vale will pay USD 2.5 billion, of which USD 500 million is payable immediately and the remaining USD 2 billion on a phased basis upon achievement of specific milestones. Simandou Blocks 1 & 2 and Zogota are one of the world’s best undeveloped sources of high-grade iron ore with potential to support the development of a large scale long lived project, with low CAPEX and operating costs. The joint venture established by Vale and BSGR will implement the Zogota project and conduct a feasibility study for Blocks 1 & 2 with the creation of a logistics corridor for shipment through Liberia. In order to be granted the right to ship through Liberia, the joint venture is committed to renovate 660km of the Trans-Guinea railway for passenger transportation and light commercial use. Vale will be responsible for management control and marketing of the joint venture with the exclusivity for the off-take for all iron ore produced.
