Sydney, Australia — 08 May 2012 – A group of private Chinese magnates is plotting to take Guinea’s Simandou operation “’ the world’s largest undeveloped iron ore project “’ from giant Anglo-Australian diversified miner Rio Tinto.
MINING.com quotes Sydney newspaper “The Australian” as reporting that the swoop by China International Fund (CIF) “’ set up by a syndicate of Hong Kong traders and Sonangol, Angola’s state oil monopoly “’ is the latest turn in the fight over Simandou, an ore reserve that will turn Guinea into the world’s third-largest iron ore producer after Australia and Brazil.
The CFI proposes to take ownership of Simandou from Rio by having the Chinese-controlled and London-listed Bellzone Mining plc offer Guinea US$700 million in cash. The amount is equivalent to the sum Rio paid the West African country under an agreement reached last year.
But the report adds that the World Bank’s private sector development financing arm, International Finance Corporation, is coming to Rio’s recue.
The Washington-based IFC, which acquired its stake in Simandou in 2006, has announced that it plans to invest US$150 million of equity in the highly wanted project, as the joint venture between Rio and China’s Chalco heads towards first production.
Rio Tinto has been exploring in Guinea since 1996, but intensified its plans for building Africa’s biggest mining development at Simandou in 2007, when markets were thriving and BHP Billiton tried an unsuccessful hostile US$135 billion purchase offer.
Although the Anglo-Australian miner intended to be in production by next year, financial difficulties and the previous Guinea government’s decision to strip half of Rio’s tenements, threatening the one that holds the Simandou deposit, have delayed the process.
Rio Tinto is developing a railway, a mine and a port in order to ship its first cargo of the steelmaking raw ingredient by mid-2015, increasing iron ore output to 95Mtpa from Simandou in the future.
Source: MINING.com. For more information, click here.