Engelinvest Group Ltd., owned by chairman Jacob Engel, has sold its 51% stake in Liberian mining company Elenilto Minerals & Mining LLC to Indian mining company Vedanta Resources plc (LSE: VED) subsidiary Sesa Goa Ltd. for $90 million.
Elenilto subsidiary Western Cluster Ltd. won a Liberian government tender to develop iron ore deposits. According to Vedanta's notice to the London Stock Exchange, the potential deposits exceed one billion tons and are close to an existing port and land for a railway.
Elenilto won the tender six months ago, and was due to pay the Liberian government an initial $25 million for the franchise, plus an additional $3 million a year over the 25-year franchise period. It would also pay 21% royalties on profits. Elenilto reportedly never made the down payment.
Engel reportedly decided to sell Elenilto after anti-corruption authorities in several West African states began investigating the company and how it won its franchises. One of the regulators told the "Financial Times" earlier this week that the conclusions of investigation could be published within a week.
Published by Globes [online], Israel business news - www.globes-online.com - on August 10, 2011
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