Reuters cited a source familiar with the situation as saying that BHP Billiton has selected mining venture B&A Mineração as the preferred bidder for its stake in Mount Nimba, one of the largest iron ore deposits in Guinea.
B&A Mineração was founded by Mr Roger Agnelli former CEO of Brazil's Vale, together with investment bank BTG Pactual, which is controlled by billionaire financier André Esteves.
The source said that the venture is hammering out conditions for exclusive talks.
It said that "BHP will enter exclusive negotiations with B&A to sell its slice in Mount Nimba and its smaller iron ore assets in Liberia."
B&A, a relative newcomer with bold ambitions in the sector, beat rivals including ArcelorMittal, the world's largest steelmaker, which is strapped for cash but owns a large project of its own just over the border.
However, market sources valued the potential deal at around USD 500 million to USD 600 million.
