Glencore Unit Slows $900 Million West African Iron Ore Project
Oct. 27 (Bloomberg) — Sphere Minerals Ltd., controlled by Glencore Plc, slowed plans to develop a $900 million iron ore mine in Africa after prices of the steelmaking material plunged.
The board is reviewing the Askaf project in Mauritania, Sphere said today in a statement, after approving development in April. Askaf North had been expected to begin output in early 2017 and is forecast to yield about 7.5 million tons a year once developed.
“Taking into account the time involved in this review it is currently expected that the start of production will be delayed,” Matthew Conroy, company secretary of Sphere, said today in a statement. Sphere is 88 percent owned by Glencore’s Sidero Pty, according to data compiled by Bloomberg.
Iron ore has declined 40 percent this year as the largest producers, including Vale SA and Rio Tinto Group, increase low- cost output from Australia and Brazil, adding to a global glut. Global seaborne output will exceed demand by 26 million tons this year and 41 million tons in 2015, according to UBS AG.
The Mauritanian government reached a preliminary agreement with Glencore to share a port and railway to serve the Askaf project, according to an April filing.
Baar, Switzerland-based Glencore, which has two other undeveloped iron ore projects in West Africa, holds 79 percent of Askaf, it said in its annual report.
Peter Grauer, the chairman of Bloomberg LP, the parent of Bloomberg News, is a non-executive director of Glencore.
To contact the reporter on this story: David Stringer in Melbourne at dstringer3@bloomberg.net To contact the editors responsible for this story: Jason Rogers at jrogers73@bloomberg.net Andrew Hobbs, Keith Gosman
