Conakry, Guinea — MININGREVIEW.COM — 11 December 2008 – The Rio Tinto Group – the world’s third-largest mining company – has announced that it intends postponing investments in Guinea, where it has been considering a direct involvement in the US$6 billion (R62 billion) Simandou iron ore project.
In an interview with Bloomberg News here, Rio spokesman Jordan Feilders said this decision formed part of the company’s global reduction in spending, following the current slump in metals demand.
“Legal uncertainty over its Simandou reserve in the West African country – combined with the high capital expenditure required and the ongoing global financial crisis – means non-essential work will be deferred while risk factors are reviewed,” he added.
Rio Tinto is scaling back spending as demand for metals sinks. CEO Tom Albanese said earlier that around the world the company would be eliminating 14 000 jobs, reducing capital spending by more than half, and selling significant assets.
Rival mining giant Anglo American plc will be announcing the results of a revision of its own capital projects next week.
Rio, which owns 95% of Simandou, has described the project as “the world’s top undeveloped resource.” In September the company said it was confident it would begin producing 70 million metric tonnes of iron ore a year from Simandou by 2013. So far it has spent about US$400 million (R4.1 billion) on the project, according to Feilders.