Vale Signs Pact For Liberia Rail, Port For Simandou Iron Ore

Brazilian mining giant Vale SA (VALE) has signed an infrastructure development agreement with the Liberian government in order to transport iron ore from Guinea to a Liberian coastal port, said a senior company executive Wednesday.

Vale is planning to invest more than $5 billion to develop the Simandou iron ore project in Guinea, one of the world's highest-quality iron ore deposits. The company plans to rehabilitate a trans-Guinean railroad and build a trans-Liberian railroad in order to transport the steelmaking raw material to the coast for export.

Eduardo Ledsham, executive officer of Exploration, Energy and Projects, said at Vale's investor day in London that the company signed an agreement to build a trans-Liberian railway line that will be able to transport 50 million metric tons of iron ore annually to a port it plans to build which will be able to load that same amount each year.

The Simandou project will be developed in two separate parts simultaneously, Ledsham said. The Zogota project in southern Guinea will be the first to produce iron ore at the end of 2012 and will have a capacity to produce 2 million tons of iron ore annually.

-By Alex MacDonald, Dow Jones Newswires; +44 (0)20 7842 9328; alex.macdonald@dowjones.com

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