Guinea to award Simandou iron ore project to Chinalco
By: SEM Contributor on May 5, 2013.
It seems the government of the West African state of Guinea may be prepared to give a big stake of its iron ore reserves to Chinalco after reports of falling out with Rio Tinto. Senior politicians in the country are with the view that Rio Tinto have been in Simandou for many years and have done nothing but dish out money to expatriates with little or nothing to show for the time spent on the mines. The government has privately expressed dissatisfaction at how Rio Tinto has conducted its operation in the country and are seriously considering other options.
The iron ore project is vital to the Guinean economy and authorities are keen on handing over operations to a reputable company with a proven track record in the mining industry. Chinalco had been a minority shareholder in the project, but have demonstrated immense interest in taking the project to another level, with intent to create jobs and wealth to boost the economy.
The Guinean government has been encouraged by how a smaller company like African Minerals Limited, operating in Sierra Leone, and driven by the Romanian businessman Frank Timis, could build such a huge operation at the Tonkolili mine with only $2 billion investment, including a port and rail network facility in just under 3 years, something that has enhanced the GDP of neighbouring Sierra Leone.
Pressure continues to be piled on Rio Tinto to give a major stake to Chinalco, as Guinea’s president believes the only company capable of building Simandou is Chinalco with the assistance of the Chinese. African Minerals continues to be a major force in the African mining industry and has made head waves in its contribution to the socio-economic development of the communities around its operations.
By Ahmed Kamara