UPDATE 2-Fortescue inks deal for Gabon iron ore mine; project to start mid 2023

(Adds detail, comments from FMG COO) MELBOURNE, Feb 8 (Reuters) - Australia's Fortescue Metals Group has entered into a deal with the Gabonese government to mine iron ore from its project in Belinga and plans to start as soon as the second half of 2023, the company said on Wednesday. Fortescue, the fourth-largest iron ore miner globally, is in search of high grade iron ore to blend with its Australian product to bring it closer to that of rivals Vale SA , Rio Tinto Ltd and BHP Group . The deal will allow it to add to its higher grade offering after ore from its Iron Bridge project in Australia comes on-line in March, the company said. "It is literally one of the last high grade mega deposits on the planet," Chief Operating Officer Dino Otranto told Reuters in an interview.

Financial terms of the deal were not disclosed.

The project will initially ramp up to 2 million tonnes a year, while Fortescue determines how much larger it could get, Otranto said. The Belinga deposit, which Fortescue has been assessing since 2018, could rival Guinea's giant Simandou deposit for scale and quality, he added.

"That's why we are here, that's why we are spending the capital," he told Reuters.

Fortescue said that the costs involved for the early-stage mining development would be about $200 million over calendar 2023-2024 period. The deal governs all legal, fiscal and regulatory regimes

Iron ore will be trucked and railed over existing roads and rail infrastructure, and will be shipped from the Owendo Mineral Port, near Libreville, the company said.

Ivindo Iron SA will be the operator with a 90% stake in the project. Fortescue is taking an 80% stake in Ivindo Iron while the African Transformation and Industrialization Fund will take a 20% stake. The government of Gabon will have the remaining 10% stake in the project. (Reporting by Jaskiran Singh in Bengaluru; Editing by Shailesh Kuber and Nivedita Bhattacharjee)

Reuters

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UPDATE 2-Fortescue inks deal for Gabon iron ore mine; project to start mid 2023

By Reuters

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