30.07.2010 | Editor: Marcel Dröttboom
Rio Tinto and Chinalco subsidiary Chalco signed a binding agreement to establish a joint venture (JV) covering the development and operation of the Simandou iron ore project in Guinea.
Beijing, PR China – Rio Tinto and Chinalco subsidiary Chalco signed a binding agreement to establish a joint venture (JV) for the development of the Simandou iron ore project in Guinea. This binding agreement follows the signing of a memorandum of understanding between Rio Tinto and Chinalco announced on 19 March 2010. The agreement covers all aspects of how the JV and project itself will operate and be governed, including planning, construction and management of the mine and associated rail and port infrastructure.
Jan du Plessis, chairman, Rio Tinto and Xiong Weiping, president, Chinalco, and chairman and chief executive officer, Chalco, attended a signing ceremony in the Great Hall of the People in Beijing on July 29. Government officials from China, Guinea, the United Kingdom and Australia were represented at the event.
Under the terms of the agreement, Rio Tinto‘s 95 per cent interest in the Simandou project will be held in the new JV. Chalco will acquire a 47 per cent interest in the new JV by providing US$1.35 billion on an earn-in basis through sole funding of ongoing development work over the next two to three years. Once Chalco has paid its US$1.35 billion, the effective interests of Rio Tinto and Chalco in the Simandou project will be 50.35 per cent and 44.65 per cent respectively. The remaining five per cent will be owned by the International Finance Corporation (IFC), the financing arm of the World Bank.
Both Rio Tinto and Chalco are keen to progress the project as soon as possible and are working with all stakeholders to expedite the process. The formation of the JV will be finalised in consultation with the Guinean Government and following satisfaction of various regulatory requirements.
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