Vale is facing an uphill task at its Zogota iron ore mine in Guinea due to stiff resistance from the local community. Despite the damage caused at the mine in last month’s attack by local villagers, the company said that it remains confident of beginning production by end of the year. The mine was attacked on 30th July 2012 and the damage caused has been estimated between $50-$100 million.

Three days after the attack, security forces cracked down on the village of Zogota in an overnight clash that killed at least five people. This has added fuel to fire and made it more difficult for Vale to make peace with the local community.

Guinea is the world’s top supplier of bauxite and has attracted billions of dollars of investment into its iron ore deposits, but it remains one of the most politically turbulent and least developed countries on the planet, with tensions evident between mining firms and local communities.

Vale said in May that tight credit and the government demand to be awarded a bigger cut by boosting royalties on iron ore production, could ultimately lead it to abandon the Zogota mine project, which taps into the Simandou iron ore deposits.

Source - Trefis‎

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