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World Bank Document FOR -IMMEOIATE RELEASE WORLD , • INTERNATIONAL BJ-\NK FOR RECONSTRUCTION AND DEVELOPMENT 1818 H STREET, N.W., WASHINGTON 25, D. C. TELEPHONE: EXECUTIVE 3-6360 Public Disclosure Authorized PRESS RELEASE NO. 628 SUBJECT: $66 million loan for iron March l 7, 196o ore development in Mauritania The World Bank today made a loan e~ivalent to $66 million for the develop­ ment of high-grade iron ore deposits in the Islamic Republic of Mauritania in northwest Africa .. The project will open up completely new opportunities for economic growth in Mauritania, where the severity of natural conditions Public Disclosure Authorized narrowly limits expansion of the traditional agriculture and livestock raising. Revenues from taxes and royalties should dramatically reverse the present chronic budget deficits and provide Mauritania with a unique opportunity to become self-supporting. • The loan was made to the Societe Anonyme des Mines de Fer de Mauritanie (Miferma), a Mauritanian company whose share capital is widely held. Somewhat Public Disclosure Authorized over half the shares are held by French, British, German and Italian consumers of iron ore or their representatives, who have signed long-term contracts to purchase at least tJ1:ree million tons of ore a year. The remaining shares are held by private French financial interests (20%) and by an agency of the French Government responsible for mineral exploration and development (27%). Tbe Bank loan will help to finance equipment and services to mine ore at a rate which would eventually reach six million tons a year; construction of a 415-mile railway to transport the ore from the mines nea.r Fort Gouraud to Port Public Disclosure Authorized Etienne on the Atlantic coast; and construction of port and other facilities • • - 2 - • The iron ore deposits are located in a low mountain range, lmown as the Kedia D-'Idjil, which rises 1,800 feet above the Saha.ran plain near the old military post of Fort Gouraud. Open pit reserves are estimated. to be about 115 million tons with an average shipping grade of 63'1/o; the ore is similar to high-grade Swedish and South American ores. The ore will be mined by con­ ventional open-pit methods and shipped after simple crushing. The ore will be transported to Port Etienne in long,heavy trains, carry­ ing 10,000 tons on a single trip. Facilities to be installed will be capable of loading or unloading a train in three hours. Each train will be made up \, of about 135 wagons, headed by four 2,000 n.p. diesel-electric locomotives, and will have an average operating speed of 40 miles an hour. The 415- mile railway will be a single track, standard-gauge line with heavy rails welded throughout,, It will traverse open desert and. the movement of trains will be controlled by radio. • The main bay on which Port Rtienne· is located is well protected and has deep water close inshore. The new port facilities will provide berthage for ships of up to 6o,ooo deadweight tons. storage will be provided for the stock­ piling of about 650,000 tons of ore so that shipments· can be maintained during the · .. four hottest months of the year when mining operations will be cut 50a/o. The initial capacity,of facilities for loading ships will be 3,000 tons an hour, with provi$ion for an increase to 6,000 tons. Because of the isolated. location of the deposits and of the port, Miferma will provide housing and community facilities, workshops, water and power supplies at both Fo:i:~t Gouraud and. at Port Etienne. When the mine, railwa.y, port and auxiliary services are in full operation, Miferma ,yr.ill employ about • 2,000 people, of whom .about tv10-thirds are expected to be recruited locally. .· 3 - A training center will be set up at Port Etienne to assure that skilled Ma.uritanians will be available for the operational period. The new town • to be created at Fort Gouri~ud may have u:p to 3,500 inhabitants, and the population of Port Etienne, now a small fishing village, may rise as high as 10,000, if the other investments which it is hoped the presence of Miferma will stimulate are carried out. Work on the port and the railroad is scheduled to start soon. The rail­ road is expected to take about four yea.rs. to complete, but mining operations will start in about two years to build up a stockpile of ore ready to ship as soon as the railroad is through. At that time the mine and railroad will have a capacity of four million tons a year, which will be increased thereafter to six million tons by the installation of additional mining and transport equipment • The cost of the completed project is estimated at the equivalent of $190 • million. To reach the four-million ton stage will require about $150 million, which will be financed by share capital and. loans from the French Government in addition to the Bank loan of $66 million. The equivalent of $40 million required. to increase capacity to six million tons a year is expected. to come I' from funds generated by operations. Procurement of goods and services will be on an international basis to the fullest extent practicable. The loan is for a term of 15 years and bears inter.est of 6/:;% per m...mum including the 1% commission which is allocated. to the Bank's Special Reserve. Amortization will begin in January 1966. The loan is .guaranteed. by the Republic of France and by the Islamic Republic of Mauritania. After having been approved by the Bank's Executive Directors, the loan documents were signed by His Excellency Herve Alphand, Ambassador for France in the United States, on behalf of France; by His Excellency Mokta.r Ould Daddah, Prime Minister of the Islamic Republic of.· ·Mauritania, on 'b~ha.).f of Mauritania; by M. Paul Leroy-Beaulieu, President of Societe .Anonyme des Mines de Fer de Maurita.nie, and by Mr. J. Burke Knapp, Vice President, on • behalf of' the World Bank. -«,.,,_,, i, MAURITANIA ~·+,., • D • • C ""''·. ""'\ MIFERMA PROJECT '~--~.~ ~Ct-~ t ~- /"; .... 1\ .. ~ ,1..,.,,• .i "'·'-.-~····~ ;( 1),,.. / (J .··::.~.,-..,,. '-,, ~j ·""'). \,• ' ... +-+ +-+ ++.... PROPOSED RAILWAY l •·• ,.> :;:::. ,.:.:.: 1jJ:: SHIFTING DUNES -\,.,,~.,~--·.i'•t.""'j•, .. J. Q ..... -·-·-·~·- SAND DUNES .,,,,.-· t:l~·i:·:.;~~) • MOUNTAINOUS AREA / ~-\ l ROADS / ti Ji fj INTERNATIONAL I rJ BOUNDARY I ()t.,~ 10 20 30 40 50Mi I ./l i '.;,( 10 20 30 40 50Km (.?tJ p I I I 1-----d i i (:i i.. \ C, ~~ i lJ I) 0 Fo~r~::'.;;~~~~' J.._ ' (} \ .~:,1 0 ti ~ -=.f'\., .. , :.,'/ Q • QI"' ,,..., ~ ,..,"!-~·'0 :..: a ~i\ \ C ~ 0 ~ 0 l i ~ 0 IR <CD ; ~~~,.., ... ,.,,,./ ~6 r.::.9 t-;1 ~ft ~ ~.: ;{,.;.:.:: ';;/~~ i;~ ,, ...,_._.,,,. .i ./.. / REPUBLIC OF NIGER MA!Jl OCTOBER 1959 - 4 - The Economy of Mauritania • The Islamic Republic of Mauritania is an autonomous republic within the Community established by the French Constitution of October 1958. Mauri­ tania has full sovereignty except for those affairs which are the re­ sponsibility of the Community -- defense, foreign affairs, currency and economic and financial questions common to the Community as a whole. In area, Mauritania is .twice the size of France and extends 800 miles north and northeastward from the Valley of the Senegal River into the Sah~a .. Most of the country is desolate, barren and empty and the climate is hot and dry. Hot, desiccating winds blow most of the year and. the temperature is well over 100 degrees Fahrenheit in the summer. Regular rain is limited to the southern regions where an annual total of 10-25 inches falls. in 3 to 5 · months. The country is flat except for a central ridge of low rock formation. The small and scattered population numbers between 650,000 and 1,000,000. Somewhat over 100,000 are Negroes settled on the banks of the Senegal River, and the remainder are Maures, of predominantly Arab and Berber blood, who live as nomad~ with their herds farther to the north. The economy of Mauritania is primitive and the average level of incomes is among the lowest in West Af'rica. About 90% of the people live from agri­ culture, largely on a subsistence basis. There are only about 20,000 wage and. salary earners, of whom 18,000 belong to the public sector, including military personnel, and receive half or more of their pay from France. other income-producing activities a.re virtually non-existent • Du.ring the rainy seasons, the arid plains up to the 20th parallel become immense grazing grounds where the greater part o:f the population live with • and by their herds, drifting southwards in the dry season in search o:f food and. water, and. trading live animals and livestock products for cereals and other basic necessities. Perhaps as many as 40,000 cattle and 250,000 sheep, goats and camels are expnrted. each year on the hoof to the Senegal and Sudan Republics. Settled agriculture is confined. to scattered oases and the north bank of the Senegal river; a limited area has been added by irrigation. The main crop is millet, of which 80,000 tons were harvested in 1956. The only other cereal is maize, of which 6,000 tons were grmm in the same year. Peanuts, fruit and vegetables are also grown but vegetables are the only product traded in any quantity. The fishing grounds off the Mauritanian coast are said. to be very rich. French trawlers and trawlers from the Canary Islands land part of their catch at Port Etienne, where the fish is dried or salted and between 2,000 and 3,000 tons a year re-exported to other West African countries.
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