(Reuters) - Guinea has launched operations at its first iron mine, a joint venture between Africa-focused miner Bellzone, the China International Fund (CIF) and the government of Guinea, with estimated reserves of 40 million tonnes of ore.
The West African nation is the world's biggest shipper of bauxite, the feedstock ore for aluminium, accounting for around one-third of international supplies, but there is growing interest in its iron reserves.
"Total investment in the project is over $300 million ...Production volume will be 4 million metric tonnes per year and will subsequently grow to 10 million tonnes," CIF's Guinea manager, Jack Cheung, said at a launch ceremony on Sunday.
Exploration operations are still under way on the concession to determine the existence of further reserves.
The government of Guinea holds a 15 percent stake in the venture as part of a resource-for-infrastructure deal signed in 2010 with CIF.
The remaining 85 percent of the venture is shared in a 50-50 deal between Bellzone and CIF.
Iron ore from the mine will be exported via a new port in the town of Forecariah built by the joint venture company, Guinea Development Corporation, with the first shipment to be loaded by June 30, a mines ministry official said.
Guinea relies on minerals for more than 70 percent of its exports. Aside from bauxite, it also produces gold. But iron ore is its major growth industry.
Joint ventures by Rio Tinto and Chinalco, and Vale and BSG Resources, are spending more than $5 billion on the Simandou and Zogota iron ore projects.
Rio has said it may start exporting iron ore from the Simandou project before the targeted 2015 using trucks to transport ore to the port. It has committed more than $1 billion for studies on a 650 km railway to link the mine in the north to the west coast of the Gulf of Guinea nation.