Asia's demand triggers frontier integration in Africa via mining co's
Thursday, May 27, 2010 at 12:03AM 
FT story.
The basics:
Six of the world’s biggest mining and steel companies have converged on an unprecedented scale on a mineral-rich corner of west Africa beset until recently by civil war.
The companies plan to spend billions of dollars in Guinea, Liberia and Sierra Leone, where some of the world’s richest deposits of iron ore, the raw ingredient of steel, are found.
The groups are Vale, the Brazilian iron ore miner, Rio Tinto and BHP Billiton, the Anglo-Australian mining houses, ArcelorMittal, the UK steel company, Russia’s Severstal, and Chinalco, the state-owned Chinese mining company.
Buoyant demand for steel has lifted iron ore prices, intensifying global competition for Africa’s hitherto little exploited deposits, and pushing companies into increasingly risky territory.
Liberia and Sierra Leone emerged only recently from civil wars, while Guinea has been teetering on the brink of conflict since the death of dictator Lansana Conte prompted a military coup in 2008.
As yet there is little infrastructure to facilitate mineral exports from any of these countries, whose governments want to use the multinational corporations to fund the ports, roads, and railways needed to lift their struggling economies.
Last month, Vale agreed to spend between $5bn-$8bn on building mines, ports, and railways in Guinea and Liberia by 2020. By comparison, the gross domestic product of Liberia is under $1bn (€800m, £700m).
Done well, this can be a big boost to local economic development. The hoped-for key difference with the past is the sustained, boom-like demand from Asia, which constitutes a socio-economic revolution all its own for Africa.
Takeaway: compared to our tiny Africom effort, this is SysAdmin work on a grand scale.
The good news: America's role in shrinking the Gap shrinks by the day. The bad news? TBD.
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