Senegal confirms iron ore deal awarded to Mittal

DAKAR, Feb 23 (Reuters) Senegal confirmed today that it had awarded a contract for the Faleme iron ore project to Arcelor Mittal , the world's largest steelmaker, after renouncing a previous deal with South Africa's Kumba Iron Ore .

''We'd renounced the contract with Kumba some time ago ...

Yes, we've signed with Mittal for 2.2 billion dollars,'' Energy and Mines Minister Madicke Niang told Reuters.

Arcelor Mittal announced it was developing the Faleme project in southeast Senegal as part of its aim of pursuing a strategy of increasing the share of metal supply it directly owns.

Kumba, Africa's biggest iron ore producer, which is majority-owned by Anglo American Plc , said it was seeking clarification from Senegal's government over the disputed mine.

But, confirming Senegal's choice of Mittal, Niang said: ''We're heading for a dispute arbitration.'' ''Kuma were only interested in the mine. But the president (Senegalese President Abdoulaye Wade) wants a package, the railway, the steel mill and all that goes with it,'' the minister added.

The project agreed with Mittal comprises building a new port near Dakar and the development of approximately 750 kilometres of rail infrastructure to link the mine with the port.

REUTERS SAM RK2245