Guinea loosens up on stalled mine
The Guinean Government set the tone for the meeting over the weekend when it revealed willingness to allow a third party to build the railway for the giant iron ore project, which could cost up to $US20 billion ($20.9 billion), according to the latest estimates.
The comments by Guinean President Alpha Conde could help overcome delays caused by Guinea's inability to secure finance to cover its share of costs.
"What's important to us is that the railway is built, so we're open to any solution that allows the construction of the railway," President Conde told Bloomberg.
"We are open to a partner fin-ancing 51 per cent or all of it. That depends on the agreement we have with Rio Tinto."
The project has been frozen for several months as Guinea struggles to secure funding for its share, and while Rio completes a major cost-cutting and divestment program.
Just last week another Guinean minister revealed that Rio would not have the mine in production by 2015 as planned.
Rio's partners in Simandou include Chinese state-owned enterprise Chalco, and the World Bank's International Finance Corporation.
Rio Tinto chief executive Sam Walsh participated in a summit with British Prime Minister David Cameron on Saturday, where he called for pro-growth policies in the developing world, and pledged support to the new transparency laws for the resources sector that were recently passed by the European Union.
The laws will increase disclosure levels around payments that mining, oil and gas companies make to governments on a "project by project" basis.
Mr Walsh's support came despite Rio and seven other big resources companies (Xstrata, BHP Billiton, Total, BP, Royal Dutch Shell, BG and Anglo American) campaigning against "project by project" reporting.
Frequently Asked Questions about this Article…
Simandou is a giant iron ore project in Guinea that includes a major mine and a new railway to export ore. Rio Tinto is the major developer named in the article, with partners that include Chinese state-owned Chalco and the World Bank’s International Finance Corporation (IFC).
The project has been frozen for several months largely because the Guinean government has struggled to secure finance for its share of the costs, while Rio Tinto is focused on a major cost‑cutting and divestment program. A Guinean minister also revealed Rio would not have the mine in production by 2015 as originally planned.
Guinean President Alpha Conde said the government is willing to allow a third party to build the railway and is open to partner financing—potentially 51% or even all of the railway funding. That flexibility could help overcome the funding deadlock that has delayed the project.
Latest estimates cited in the article put the potential cost of the project, including the railway, at up to US$20 billion (about $20.9 billion).
The article names Rio Tinto as the lead developer and lists Chinese state-owned Chalco and the World Bank’s International Finance Corporation (IFC) as partners involved with Simandou.
Sam Walsh took part in a summit with British Prime Minister David Cameron, called for pro‑growth policies in the developing world and pledged support for new European Union transparency laws that require increased project‑by‑project disclosure of payments by mining, oil and gas companies.
The article notes that Rio Tinto and seven other big resources companies—Xstrata, BHP Billiton, Total, BP, Royal Dutch Shell, BG and Anglo American—had campaigned against project‑by‑project reporting, even though Sam Walsh publicly pledged support for the new laws.
Investors should monitor developments on Guinea’s funding stance (including any third‑party railway financing), official project timelines, and Rio Tinto’s cost‑cutting or divestment moves—since these factors drive whether Simandou restarts and how it might affect Rio’s future capital plans and disclosure practices.
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