* Discussing with ArcelorMittal export route via Liberia
* Trims mining investment expectations for next decade
By Silvia Antonioli
CAPE TOWN, Feb 9 (Reuters) - Guinea expects to start anauction of the mining rights to half of one of the world'slargest untapped iron ore resources in the next two monthsirrespective of arbitration with previous holder BSG Resources(BSGR), the country's mining minister said.
BSGR, a unit of Israeli billionaire Beny Steinmetz'sbusiness conglomerate, was stripped of its license to developpart of the Simandou deposit following a Guinean investigation.The company is seeking arbitration and has threatened to suecompanies that invest in its former license area.
"We are completing the documents for the auction. I believethat these documents will be ready in the next two months,"minister Kerfalla Yansane told Reuters in an interview on thesidelines of the Mining Indaba conference in South Africa.
"There is no link between the arbitration and the auction.These assets belong to the government."
Miner Rio Tinto holds the right to developthe southern half of the deposit, which could produce about 100million tonnes of iron ore a year, or just below 10 percent ofthe global seaborne iron ore market.
In the northern half, the government took back miningconcessions from BSGR and its Brazilian partner Vale after a government panel said in a report it had found BSGR gotthe rights from the previous administration through"corruption".
BSGR has rejected accusations of wrongdoing.
Yansane said he did not expect the arbitration, the Ebolaepidemic affliciting the region, or the falling price of ironore to put off investment in the country. Spot iron ore pricesare hovering at more than five-year lows.
He said he expected about $30-40 billion in mininginvestment within the next five to 10 years, trimming a previousestimate of $50 billion in the next decade which some in themining industry say is far too optimistic.
Companies including Glencore and steel producerArcelorMittal had discussed with Guinea potentialinvestment in the country, the minister said.
Guinea is also negotiating with ArcelorMittal, which lastyear acquired a slice of the Mount Nimba iron ore project fromBHP Billiton, over whether to allow it to export ironvia a route that crosses neighbour Liberia.
So far only small miner Sable Mining has been given thatoption by Guinea, which is expecting the construction of amulti-billion dollar trans-Guinean rail line for bigger projectssuch as Simandou.
"We are open to give permission (to go via Liberia) to allcompanies that meet the requirements," the minister said.
An investment framework signed by the government and RioTinto Guinea details that small miners that produce up to 5million tonnes a year in operations around the Liberia border,can ask for permission to export via Liberia, he said.
"If ArcelorMittal is meeting the criteria why not? But Idon't think they are meeting the criteria. Mount Nimba is a bigproject. It's about 30 million tonnes," Yansane said. "We arediscussing with them to see what route they want to take andwhat could be the conditions."
(Reporting by Silvia Antonioli; editing by Susan Thomas)
