HomeBase MetalsGuinea and Rio Tinto at odds over iron ore project

Guinea and Rio Tinto at odds over iron ore project

The Simandou iron ore
project in a remote
part of Guinea
Dakar, Senegal — MININGREVIEW.COM — 26 September 2008 – The government of the West African state of Guinea wants more talks with Rio Tinto – the London and New York-listed international mining group headquartered in the United Kingdom, and the world’s third-largest mining company – about its key Simandou iron ore project in Guinea. The US$6 billion (R48 billion) project is crucial to Rio’s future production portfolio as it fights off a hostile takeover bid from rival miner BHP Billiton.

Reuters reports from Dakar that, stating this in a Radio France International broadcast, the Guinean Prime Minister Ahmed Tidiane Souare said: “We are a little angry with Rio Tinto lately. We feel the company has not respected all the engagements taken under the contract.”

Speaking in New York, he said his government intended to discuss the project with Rio Tinto to “clarify” issues.

Earlier this month, Rio Tinto claimed that Guinea had agreed to “move forward” with Simandou. Previously, a letter from the office of President, Lansana Conte, had said a licence for the project was being cancelled.

First production at Simandou – which Rio says is the world’s biggest known undeveloped iron ore deposit – is due in 2013, and full output is forecast for 2018.

Rio Tinto claims that it has already invested US$300 million (R2.4 billion) in Simandou, and says it is now carrying out further research work for the project, which would include building a 740 km railway line to a port on the Atlantic coast.

The company estimates that it could mine 70 million tonnes per year from the mine by 2018.