Bloomberg reported that Gabon is close to removing control of its largest iron ore project from China Machinery Engineering Corp and awarding it to BHP Billiton Ltd.

As per report Gabonese officials including Mines and Oil Minister Alexandre Barro Chambrier will meet executives of Melbourne based BHP in Cape Town early next month to complete the deal, Mr Michel Edzang an official at the Mining Department and adviser to the minister in an interview said in Libreville.

The West African nation started a review in 2010 of Belinga after a consultant to the government said progress developing the mine had been slow.

China Machinery, which had estimated Belinga could produce 30 million tonnes of the steel making raw material a year at a cost of about USD 3.5 billion, said it remained in talks on the venture.

Mr Cai Ning manager of China Machinery’s engineering department said that “We’re still discussing with the Gabon government on how to solve the problems. We’re waiting for their reply. We didn’t say we’re withdrawing and the project is still ongoing.”

China has strengthened ties with Africa as it seeks to secure access to the continent’s raw materials. Export-Import Bank of China loaned about USD 67.2 billion to sub-Saharan African nations in the past decade, according to a Fitch Ratings report in December.

A move into Gabon would mark a shift by BHP toward diversifying its production of iron ore, which is dominated by output from mines in Western Australia. Iron ore contributed 29% of BHP’s USD 71 billion in sales for the 2011 fiscal year.

(Sourced from Bloomberg