Following low iron prices, which indications are will not be recovering anytime soon since their fall in 2011, Rio Tinto Group announced that it will delay development of the $20 billion Simandou mine and related infrastructure to mine the world’s largest untapped iron ore deposit in Guinea.
Jean-Sebastien Jacques, CEO of the second-biggest mining company, said he “didn’t see a way forward for Simandou”, in which Rio Tinto holds a 47 percent stake, following market conditions.
However, the government of Guinea, which is Rio Tinto’s partner in the project, insists that Rio Tinto has an obligation to start work as soon as possible.
In a press briefing in the country’s Capital, Conakry, Guinea’s mining minister, Abdoulaye Magassouba, said: “Our objective is to develop the project as fast as possible and we are making sure that a partner cannot freeze it. We’re asking partners not to make decisions that’s in the interest of their shareholders only.”
The government views the project as a catalyst for economic development which will double the size of its $6.5 billion economy and turn it into the third-biggest iron-ore exporter.
Sourced from Bloomberg News and adapted for African Mining Brief online