Senegal+Strategic+Minerals

=China Is Likely To Make Moderate Investments Into The Faleme Iron Ore Project In The Next Five Years=

Executive Summary:
It is likely that Senegal will receive significant Chinese investment toward its mineral mining industry in the next five years, particularly in iron ore. As of 2013, Senegal has seen very little investment from China, with Chinese investments being focused toward infrastructure projects. Senegal contains large deposits of iron ore and gold. In 2007, the Luxembourgian company ArcelorMittal made a USD 2.2 billion investment encompassing the development of the Faleme iron mine, upgrade of the Dakar port, and a 750 km railway stretching from the mine to the port. ArcelorMittal ultimately abandoned the project, which has lead Senegal to search for other possible partners. In 2010, the Senegalese government proposed a variety of investment projects to the Chinese government, including the iron ore project.

Discussion:
Senegal's mining industry accounts for around 20 percent of Senegal's export earning along with 20 percent of the country's GDP. The industry mainly produces gold and was ranked above South Africa in its attractiveness to investors in 2013 by Randgold Resources.

In 2007, Luxembourg-based ArcelorMittal made an investment of USD 2.2 billion toward the development of the Faleme iron mine. Along with developing the mine, the investment covered an upgrade of the Dakar port and a 750 km railway stretching from the mine to the port. Due to the global financial crisis, ArcelorMittal ultimately abandoned the project. Senegal took the case to Court of Arbitration of the International Chamber of Commerce stating that ArcelorMittal breached their contract. In 2013, Senegal won the case and was cleared to rescind the contract.

These turn of events lead to an opportunity for large amounts of foreign investment. Senegal is now looking for investors for the Faleme iron project. In 2010, Senegal sought investment from Chinese firms for a variety of projects, with the Faleme iron project among them.

Analytic Confidence:
Analytic confidence is medium. Source reliability ranges from medium to high. There is no conflict between sources. The analyst had low expertise on the subject, did not use a structured analytic method, worked alone, and collaborated with a team. The subject is moderately complex and the deadline was moderately difficult to meet.


 * Analyst****:** Jared DeTal

http://www.bloomberg.com/news/2012-11-08/senegal-to-seek-new-iron-ore-partners-after-arcelormittal.html http://china-wire.org/?p=5042 http://www.sino-group.com/en/kydt/kydt20100515.html http://www.mbendi.com/indy/ming/af/sn/p0005.htm http://www.mining.com/africas-increasing-risks-scaring-off-mining-investments-report-34224/ http://www.bdlive.co.za/business/mining/2013/07/11/senegal-rated-above-sa-on-gold-mining http://online.wsj.com/news/articles/SB10001424127887324094704579068551077225962 http://minerals.usgs.gov/minerals/pubs/country/2011/myb3-2011-ga-pu-sg.pdf