The Fortescue Metals Group Limited (ASX: FMG) share price is under the spotlight on the Belinga iron ore project in Gabon.
Gabon is a country in West Africa and Fortescue is one of the biggest iron ore miners in the world, though all of its active iron mines are currently based in Australia.
The Belinga deposit was initially discovered in 1955 and subsequent exploration in the 1970s identified high iron and low contaminant and mineralisation. This project has been progressively assessed by Fortescue since 2018.
Belinga iron ore project in Gabon
Fortescue Metals has entered into an agreement with the Government of the Republic of Gabon to study the opportunity to develop the Belinga Iron Ore Project in Gabon.
The agreement includes a 36-month exclusivity period over an area totalling approximately 5,500 square kilometres to study and negotiate a mining convention for the development of the Belinga project.
A separate Gabon mining company will be established for the mining convention and to hold the mining tenure over the Belinga project.
The mining company will be established by a joint venture which will be owned 80% for Fortescue and 20% by the Africa Transformation and Industrialisation Fund, an Africa-focused investment fund incorporated in Abu Dhabi.
This joint venture will initially focus on exploration works to determine the potential size and grade of the Belinga iron ore deposit and logistics solutions during the 3-year exclusivity period.
Gabon ministers noted that it’s one of the largest high grade iron ore deposits and that the project will help build the mining sector’s contribution to the economy, helping deliver training, jobs and skills.
Fortescue Chair Dr Forrest believes that the iron ore project is potentially one of the world’s largest undeveloped, high grade hematite deposits in the world.
Fortescue CEO comments
Fortescue CEO Elizabeth Gaines said:
“Fortescue is pursuing global opportunities in iron ore that align with our strategy and expertise. We look forward to working with the Gabon Government on this project as we continue to invest in assets to optimise growth and returns in our iron ore business.”
Summary thoughts on Fortescue and the share price
Diversifying and expanding its sources of iron ore would be attractive for Fortescue. If the miner can find attractive global deposits of materials other than iron, that would be particularly useful.
I think Fortescue looks decent value for the materials side of the business, and the green industry segment is a very useful long-term growth avenue. I’d prefer to buy at a lower price, but I wouldn’t mind starting a position at today’s Fortescue share price.
