Escalating greenfield project development costs, a lower raw material pricing environment and investor wariness have seen the world’s largest miners scale down their African iron ore ambitions in the past two years.
Mining majors BHP Billiton, Vale and Rio Tinto have all pared back early-stage operations in Africa by reducing capital expenditure, clearing a path for smaller enterprising producers to take a foothold in the market.
In Sierra Leone, London-listed producers African Minerals and London Mining have led the way.
Entering the market with phased production from low-cost projects, both miners have succeeded in establishing a new regional brand of ore in the market since starting production in 2011.
Traders have welcomed the flow of iron ore from West Africa into the seaborne market. For example, trading houses such as Glencore, which has offtake agreements with both London Mining and African Minerals, and Vitol, which sells a percentage of Marampa’s...