Rio Tinto board signals approval for Simandou iron ore development in Guinea

The board of Rio Tinto has thrown its support behind the development of a large scale iron ore project in Guinea, where it controls half of the Simandou deposit.

Simandou is the world’s biggest untapped iron ore resource, but its development has been stalled by disputes over ownership rights and the large investments required to extract and transport the ore.

Ownership of Simandou is divided into four blocks, with 1 and 2 controlled by a consortium backed by Chinese and Singaporean companies, while Rio Tinto and Aluminum Corp of China (known as Chinalco) own blocks 3 and 4.

Rio had previously struggled to reach an agreement with the rival Sino-Singaporean consortium on the building of a 650 km railway linking the mine to a planned port, however those tensions eased last month after the Guinean government brokered a deal between the two parties.

“The board has given in-principle approval to the path forward for the development of the Simandou iron ore project in Guinea,” Rio’s chairman Simon Thompson said at the company’s annual general meeting today.

Rio’s share of the project could deliver more than 100 million tonnes of iron ore a year to the market by as early as 2026, although the board’s full approval will need to wait for more details on costs and the infrastructure agreement. Simandou’s development has also been repeatedly delayed by legal disputes and government changes in Guinea.

@RGNonline