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GUINEA: Rio Tinto to Spend $170M More to Develop Simandou Iron Ore Project

August 2, 2010

UPDATE 1-Rio oks $170 mln more for Guinea iron ore project

Mon Aug 2, 2010 1:39pm GMT

 

* New investment on top of $650 mln spent so far

* To build 650-km rail, mine to produce 95 mln tonnes a year

(Adds details, background, quotes)

LONDON, Aug 2 (Reuters) – Miner Rio Tinto has approved spending an additional $170 million to develop its Simandou iron ore mine project in Guinea on top of the $650 million it has already invested, the Anglo-Australian group said on Monday.

“Simandou will be the largest integrated iron ore mine and infrastructure project ever developed in Africa,” said Sam Walsh, chief executive of the group’s iron ore division.

Mining is expected to be launched within five years at the mine, which is due to produce at least 95 million tonnes of iron ore a year, a statement said.

The total cost of developing Simandou has been estimated at around $6 billion.

The infrastructure will include a 650-kilometre railway to the coast and port facilities, Rio said.

Last week, Rio signed a $1.35 billion deal with Aluminum Corp of China (Chalco) (2600.HK: Quote) for a joint venture on Simandou, billed as the world’s largest undeveloped iron ore deposit. [ID:nTOE66S071]

Guinea’s Mine Minister told Reuters on Monday that he hoped the Rio-Chinese partnership would speed up development of the project, but said the government had not yet approved the deal. [ID:nLDE66U05H] (Reporting by Eric Onstad; Editing by Louise Heavens)

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