Guinea halts Simandou iron ore project, mulls talks with new partners


Rio Tinto's Guinea subsidiary Simfer SA and Chinese-backed consortium Winning Consortium Simandou (WCS) have shown a "lack of willingness" to work on a partnership, Mines Minister Moussa Magassouba said in a July 3 letter addressed to both companies.

Guinea's mines minister has ordered all work related to the Simandou iron ore mine project to be halted after the two companies involved missed an extended deadline to agree on a joint venture, a letter seen by Reuters showed on Monday.

Rio Tinto's Guinea subsidiary Simfer SA and Chinese-backed consortium Winning Consortium Simandou (WCS) have shown a "lack of willingness" to work on a partnership, Mines Minister Moussa Magassouba said in a July 3 letter addressed to both companies.

In a later statement, the government said it was open to discussions with new partners in the ambitious project that aims to extract iron ore from Guinea's remote hinterland to a port hundreds of kilometers away, but which has been dogged by delays in recent years.

"Despite the significant concessions the Guinean State has been kind enough to make, it is clear the obstruction is being maintained by both your companies, to the detriment of the interests of the project," Magassouba wrote.

Magassouba said the halt would apply across the country, effective from 8:00 a.m. local time (0800 GMT) on Monday.

Rio Tinto declined to comment on the latest stoppage and WCS did not immediately reply to a request for comment.

Guinea's ruling junta has suspended construction of the mine and related infrastructure once before, in March, resulting in Rio and WCS signing a framework agreement that month under which they would "co-develop" infrastructure for the mine, including a 670-km railway and a port.

The government gave the companies 14 days on June 19 to agree a joint venture, itself an extension of a previous deadline.Read full storyRead full story

The March framework agreement guaranteed the state 15% of the Simandou iron ore as well as a free and non-dilutable 15% stake in the railway and port joint venture, the government has said.

The mines minister said Rio and WCS were stalling over the terms of the government's stake in the joint venture, blaming the companies for "inertia" on this issue.

Rio Tinto has held rights to Simandou since 1997. Through Rio Tinto Simfer, it owns a 45.05% stake in the southern half, Blocks 3 and 4, of the deposit, with Aluminium Corp of China (Chinalco) holding 39.95% and Guinea's government the remaining 15%.

WCS holds Blocks 1 and 2 of Simandou.- Reuters

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Guinea , Simandou , iron oe , halt , Rio Tinto

   

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