According to two people familiar with the matter Gabon is considering taking away China Machinery Engineering Corp rights to the nation biggest iron ore deposit and is in talks with BHP Billiton on the asset.

One of the people said officials from the West African country will meet BHP executives in Cape Town at a conference next month for further discussions. BHP which is developing manganese mine in Gabon has offered to deploy more than 10 exploration drilling rigs at the Belinga site.

Gabon started a review of Belinga which China Machinery has estimated would cost USD 3.5 billion and produces 30 million tonnes a year, in 2010 after a consultant to the government said progress developing the mine had been slow.

For BHP, gaining an iron ore asset in West Africa would mark a move toward diversifying its production base for the raw material away from the Pilbara region of Western Australia.

BHP, the world largest mining company, declined to comment. Ms Zhang Qingchun a spokeswoman for China Machinery said she had no information regarding the project. Gabon Mines and Oil Minister Mr Alexandre Barro Chambrier declined to discuss Belinga when contacted by Bloomberg News in the capital, Libreville.

Mr Barro Chambrier said January 14 on Radio Television Gabonaise there were accelerated discussions on the exploitation of Belinga in the northeast of the country. He declined to name the parties the government was in talks with.

China Machinery said in 2009 that it had signed a 25 year contract to build and operate the mine near Gabon border with the Republic of Congo.

As part of the agreement, the Beijing based company said it would build a 500 kilometer railway a port and a hydropower station.

(Sourced from www.smh.com.au)