04/27/2012 | Editor: Marcel Dröttboom
Rio Tinto and Chinalco's listed subsidiary, Chalco, have completed the formation of their Joint Venture to develop and operate the Simandou iron ore project in Guinea, following the completion of all Chinese regulatory approvals.
London, United Kingdom – As a result, a consortium led by Chalco has made an earn-in payment of USD 1.35 billion, in line with an agreement reached with Rio Tinto in March 2010. Rio Tinto and the Chalco consortium now hold a 53 per cent and 47 per cent interest respectively in the joint venture which translates into a 50.35 per cent and 44.65 per cent interest in the Simandou project. The remaining five per cent is held by the International Finance Corporation, part of the World Bank. The Government of Guinea retains its options for participation in the project and is expected to take up its first share in the near future.
Simandou is a world-class iron ore mining project Rio Tinto is developing with its partners in south-eastern Guinea in West Africa. The Simandou project is planned to comprise three principal components. A 95 million tonnes per year capacity iron ore mine in the Simandou Range in south-eastern Guinea, a Trans-Guinean railway of approximately 650 kilometres to transport the ore from the mining concession to the Guinean coast, and, a new deepwater port currently planned to be located about 60 kilometres in south of Conakry, in the Forécariah prefecture. Rio Tinto expects a total investment of more than USD 10 billion to bring the mine and associated infrastructure on stream with the first shipment of iron ore by mid-2015. The company has invested in the order of USD 1.5 billion to date.
According to Rio Tinto, Simandou will be the largest integrated iron ore mine and infrastructure project ever developed in Africa and will generate sustainable social and economic gains for Guinea. Thousands of jobs will be created during construction phase. Once operational the mine will have 4000 full time employees.
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