West Africa Rising: the makings of an iron ore boom?(Read article summary)
Major multinational mining companies have been flocking to West Africa over the past few years, as iron ore's soaring price and Africa's cheap labor have offset concerns about regional instability.
Freetown, Sierra Leone
• West Africa Rising is a weekly look at business, investment, and development trends.
West Africa – a region known for its poverty, civil wars, and flimsy governments – looks set to become one of the world’s most important sources of iron ore, the primary ingredient in steelmaking.
Major multinational mining companies have been flocking to the volatile region over the past few years as the price of iron ore has soared, more than tripling between 2007 and 2010. Demand for the commodity is also booming, thanks largely to the growing appetites of steelmakers in China, which is the world’s biggest iron ore importer.
The latest West African investment was announced last week, when Vedanta, India’s largest exporter of iron ore, revealed that it was buying a majority stake in Western Cluster Ltd., a network of iron ore deposits in the West African nation of Liberia. The investment marks Vedanta’s first foray into iron ore outside of its home country.
In coming to West Africa, Vedanta joins a veritable who’s-who of the iron ore industry. Brazilian mining giant Vale and Anglo-Australian company Rio Tinto have recently acquired concessions in Guinea, while BHP Billiton and ArcelorMittal are investing heavily in Liberia. Iron ore deposits elsewhere in the region – including Mauritania, Senegal, Sierra Leone, Ivory Coast, and Cameroon – have also lured investors from overseas, and even more projects could be in the works.