Vale SA, the world’s second-largest mining company by market value, will spend more than $1 billion to rebuild a 662-kilometer （411-mile） railway in Guinea, where it plans to start producing iron ore next year.
The railroad, running between the capital Conakry and Kankan, may be in operation by 2013 or 2014, Vale Chief Executive Officer Roger Agnelli said today, after Ricardo Saad, project manager for Vale’s Guinean Simandou mine, disclosed the investment. Then rail line has been out of operation since 1983.
“We shall be capable of building the railroad as soon as possible so that we can mark our presence in Guinea,” Agnelli told reporters in Conakry as the first track was laid. The event was also attended by President Alpha Conde and former Brazilian President Luiz Inacio Lula da Silva.
Mining companies including Vale and Rio Tinto Group have been lured by Guinea’s mineral riches. The West African country holds as much as half of the world’s bauxite, used to make aluminum, more than 4 billion metric tons of “high-grade” iron ore and “significant” deposits of diamonds and gold, according to the U.S. State Department.