Sable Mining confident will export iron ore through Liberia

By Stephen Eisenhammer LONDON (Reuters) - Guinea-focused Sable Mining is confident it will get a decree from the country's government to export iron ore through Liberia in the coming months, a move which would dramatically improve the project's viability, its chief executive said. Liberia, which neighbours Guinea, has an existing rail link and offers a far closer export route meaning companies with iron ore projects in Guinea, including Vale and Rio Tinto, are jostling to export through the country. But the Guinean government has been reluctant to permit this out of a desire to improve its own infrastructure. The giant Simandou project, which lies further in-land than Sable's Nimba, is one of the world's largest untapped deposits of iron ore and seen as a unique development opportunity for Guinea. "I'm 110 percent sure we'll get the papers," Andrew Groves, chief executive of Sable Mining, told Reuters in an interview referring to the decree from the Guinean government allowing export through Liberia. West Africa, and Guinea in particular, is seen as the next major frontier for iron ore, but a dire lack of infrastructure and the huge investments needed have crippled projects. Groves, who runs the company with former England cricketer Phil Edmonds, said he also expected the mining licence to be awarded this quarter, with capital raising starting next year. "We'll have to raise about $200-300 million and we'll start doing that in the new year," he said. This is likely to be made up of an equal split of bonds, equity and offtake agreements. In terms of offtake agreements Groves said he was not only looking at China, whose demand is the main driver for West African iron ore, but also at Europe. "Our grades are so high (60 percent iron grade) that we're also looking at Europe," he said. The existing rail line is used by steel giant ArcelorMittal which exports iron ore from the Yekepa mine in Liberia, just on the other side of the border from Sable's project. Groves said the line had ample spare capacity to support the 5 million tonnes of production a year Sable is targeting after 2015. But back in June head of ArcelorMittal's West African operations, Joseph Mathews, told Reuters the line was at capacity and new producers could not rely on it. Permission to export through Liberia and the mining licence would put Sable back on the map, according to Groves. In 2010 Groves, who successfully sold a previous venture, Congo-focused copper miner Camec, for nearly 600 million pounds to ENRC, said Sable would be worth $1 billion within a year. The company, whose shares have more than halved since January, is now worth $50 million. "We'll get there," he said. "In the next few months people will start taking us more seriously."