JOHANNESBURG (miningweekly.com) – The signing of a 25-year infrastructure development agreement (IDA) between Aim-listed iron-ore explorer and developer Sable Mining Africa and the government of Liberia would allow the company to use, rehabilitate and expand the established rail line from Yekepa, in south-east Guinea, to the Port of Buchanan in Liberia, to export ore from its Mount Nimba project, in Guinea.

The IDA was signed by Sable’s 80%-owned West Africa Exploration (WAE) subsidiary late last week.

"On a project-specific basis, the use of Liberia-based infrastructure for export means that, compared to its peer group, Mount Nimba's capital expenditure requirement is greatly reduced,” Sable Mining CE Andrew Groves said in a statement on Monday.

He noted that the IDA was “truly a momentous occasion” for Sable and the countries of Guinea and Liberia and was the result of many months of hard work by the company, its partners, and numerous government Ministers, staff and representatives in both countries.

"The significance of the IDA will be felt across the West African region, as it paves the way for the development of Mount Nimba which, when in production, will generate significant revenue, employment opportunities and tax income.

“The spirit of cooperation between these two countries has not only meant a defined development path can be put in place for this strategic asset but also provides a clear signal to other international enterprises that the Mano River Union region is an attractive investment destination.”

Meanwhile, the company stated that its Mount Nimba project was proving to be a unique iron-ore asset with excellent commercial potential even during periods of depressed spot prices. The high-grade, high-tonnage direct shipping ore resource would allow for the use of simple mining and processing methods to extract the ore.

“These key differentials, coupled with an established export solution and the support and cooperation of both the government of Liberia and the government of Guinea, clearly distinguishes Nimba as a high-priority target for investment and development," Groves added.

The total anticipated investment in the Mount Nimba project, including the rail infrastructure, was valued at about $1.3-billion over 25 years. Sable Mining would invest $300-million in the first five years of its initial programme and thereafter $1-billion in the remaining years of the operation.

Meanwhile, as part of the agreement, WAE would make a yearly contribution of more than $2.5-million to the Liberian government for a social fund for the affected counties. It would also pay a variable yearly concession fee for the transshipment of iron-ore products through Liberia – once exports started – ranging from $1.5-million to $5-million a year and would pay all other taxes and duties as set out in a fiscal agreement between the government of Liberia and WAE.