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Report: BHP near Nimba iron ore project stake sale

BHP Group is close to selling its stake in the Nimba iron ore deposit in Guinea for an insignificant amount as the miner is keen on sealing a deal after years of failing to sell the asset, Reuters reported Aug. 29 citing banking sources.

One of the two anonymous sources said billionaire Robert Friedland is at "a very advanced stage" of discussions to buy BHP's stake in Nimba.

The newswire added that Nimba does not fit the company's preference of operating in stable and developed economies amid legal disputes in the country as well as high infrastructure costs, which make it hard to make money from the iron ore.

However, the supply disruption earlier this year due to cyclones in Australia and the dam burst in Brazil caused a revival of interest in Guinean iron ore assets, especially Simandou and smaller iron ore deposits near the country's border with Liberia.

The three big miners competing to develop Simandou are former Xstrata boss Mick Davis, and billionaires Beny Steinmetz and Friedland.

Secretary-general of Guinea's mines ministry, Sadou Nimaga, confirmed that three large mining groups agreed to the terms of the deal and purchased access to Simandou project data, but refused to name them, Reuters added.

Nimaga said that they have 45 days, starting Aug. 19, to prepare bids that will be judged by a commission, with the winner having to provide a guarantee that it will develop the deposit.