Gabon Defends Giving China Iron Ore Mining Rights

Gabon's government on June 9 defended its decision to give China sole rights to exploit huge untapped iron ore reserves, saying it would create "thousands of jobs" for the Gabonese. "The construction work at the mine and on the various infrastructures will create 26,850 jobs for the Gabonese people," said the country's minister of mines, Richard Auguest Onouviet.

Last week, Gabon announced that it had granted a consortium headed by the China National Machinery and Equipment Import and Export Corporation (CEMEC) rights to the iron ore mine at Belinga and to build costly rail links needed to reach the reserves in the tropical forest.

According to a Gabonese government source, the financial guarantees offered by Beijing and its agreement to buy all the production, were among the reasons that swung the deal in China's favor and away from the world's leading iron miner, Brazil's Vale do Rio Doce (CVRD).

Iron ore was discovered in 1955 at Belinga, which lies in remote forest hills 500 kilometers (300 miles) east of Libreville, the capital and port on Gabon's Atlantic coast. It is thought to be one of the last major untapped iron ore reserves on the planet. Getting to the ore means that a new railway link will be needed to connect the site with Santa Clara, north of Libreville, where a deepwater port is to be built. A new hydroelectric dam will also be required to provide the necessary power.

The total cost of the project is estimated at 300 billion CFA francs (US$ 590 million).

Copyright Agence France-Presse, 2006

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