By Stephen Eisenhammer and Silvia Antonioli

LONDON (Reuters) - ArcelorMittal will have to share the Liberian rail line it is using to export iron ore with Sable Mining and others miners in Guinea who request access, Liberia's finance minister Amara Konneh said on Wednesday.

Liberia, which neighbours Guinea, has an existing rail link to the Buchanan port in the Atlantic and offers a far shorter export route from deposits such as the giant Simandou project and Mount Nimba in Guinea, which is vital for mines to be profitable at current prices.

The rail line is currently operated by ArcelorMittal <ISPA.AS>, the world largest steelmaker.

"ArcelorMittal is open to the multi-use of the rail because it is enshrined in the mineral development agreement signed with them. The government of Liberia would like to use its rail as much as possible for economic integration that is going to benefit both sides," he told Reuters.

"So this year I will be travelling between Guinea and Liberia bringing all the stakeholders together so that we can close this deal (between Sable and ArcelorMittal)."

The Guinean government has so far granted permission to export through Liberia only to Sable Mining <SBLM.L>, which is aiming to start production in 2015 and hit 5 million tonnes per year output after that.

To allow more companies to use the line though works need to be undertaken to expand its capacity and the companies wishing to use such lines will have to pay the bill for that, the minister said.

Adding a second rail line is also an option, he added.

A spokeswoman for ArcelorMittal said the firm is willing to discuss availability on the Yekepa to Buchanan railway with third parties who may want to use available surplus capacity without interfering with ArcelorMittal Liberia operations.

It is unclear whether ArcelorMittal currently has spare availability for third parties but the steelmaker is ramping up its iron ore mining operations in Liberia and expect its production will grow from around 4 million tonnes a year to 15 million in 2015.

MOUNT NIMBA

The Guinean government granted iron ore miner Sable permission to export through Liberia in October, which could increase the viability of its Nimba project.

Sable then signed a memorandum of understanding (MOU) in November with the Liberian government.

"The two government have agreed that they (Sable) will use Liberia and the Buchanan port to export ore from Guinea but just need to get the two companies to agree on the costs," he said.

Export through Guinea is also critical for the other Mount Nimba deposit owned by major miner BHP Billiton <BLT.L> and gold miner Newmont <NEM.N>.

BHP has been in talks over its 40 percent stake in the deposit with mining venture B&A Mineracao, co-founded by the former boss of Brazil's Vale <VALE5.SA> Roger Agnelli, over the last few months.

A source close to the deal said the possibility to have an export route through Liberia is vital to the sale.

Konneh said the other companies developing the Mount Nimba deposit are also welcome to export through Liberia.

"The question is about increasing the capacity so that the coming of these companies doesn't hinder ArcelorMittal operations in Liberia," he said.

"We are discussing on how to make that increase happen. The companies who want to use (the rail) will finance that."

Rio Tinto had also initially looked at exporting iron ore from its slice of the massive iron ore deposit Simandou through Liberia.

Rio Tinto however has late agreed with the Guinean government to develop a trans-Guinean route which would provide wider benefits to Guinea but would take longer to develop and involve multi billion investment.

Guinea's president Alpha Conde said in November he was confident of investor commitments to fund the costly infrastructure.

Liberia has "medium-term" plans to launch an international bond but will first seek a debt rating, Konneh told Reuters in an interview on Wednesday.

(Editing by David Evans)

 

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