Australia's mining giant Rio Tinto announced on the 26th that it has signed a "final agreement" with the Guinean government, which will provide Rio Tinto with the guarantee of the mining rights of Guinea's Simandu iron ore project.
Rio Tinto's progress is equally significant for China Aluminum. In July 2010, China Aluminum signed an agreement with Rio Tinto and the two parties will establish a joint venture company to develop and operate the Ximandudu iron ore project. According to the agreement, Chalco will invest US$1.35 billion in phases over the next few years, eventually obtaining a 47% stake in the joint venture company.
In order to get this project approved as soon as possible, Rio Tinto has made no effort. According to the statement, Rio Tinto’s subsidiary will pay US$700 million to Guinea’s treasury after the President of Guinea issued an ordinance granting mining rights and approved the joint venture between Chinalco and Rio Tinto. At the same time, the Guinean government has the right to hold 35% of the project's equity, of which 15% is for free.
For the Simandu project, Chinalco had been worried about two uncertainties: the political situation and social stability in Guinea, and the transportation plan after the iron ore was mined. Rio Tinto stated in its latest statement that the terms of the "final agreement" will not be affected by the current or future revision of the "Mining Act" by the Guinean government. At the same time, it plans to invest huge sums of money for the construction of mines and related infrastructure.
According to the statistics, the Simandu project is one of the top tier iron mines in the world that has not yet been developed. After the project is put into operation, it is estimated that 70 million tons of high-grade iron ore will be produced each year and will give priority to the needs of the Chinese market. Rio Tinto stated that after the signing of the agreement, it will make every effort to produce the first batch of iron ore at the end of 2014.
Rio Tinto's progress is equally significant for China Aluminum. In July 2010, China Aluminum signed an agreement with Rio Tinto and the two parties will establish a joint venture company to develop and operate the Ximandudu iron ore project. According to the agreement, Chalco will invest US$1.35 billion in phases over the next few years, eventually obtaining a 47% stake in the joint venture company.
In order to get this project approved as soon as possible, Rio Tinto has made no effort. According to the statement, Rio Tinto’s subsidiary will pay US$700 million to Guinea’s treasury after the President of Guinea issued an ordinance granting mining rights and approved the joint venture between Chinalco and Rio Tinto. At the same time, the Guinean government has the right to hold 35% of the project's equity, of which 15% is for free.
For the Simandu project, Chinalco had been worried about two uncertainties: the political situation and social stability in Guinea, and the transportation plan after the iron ore was mined. Rio Tinto stated in its latest statement that the terms of the "final agreement" will not be affected by the current or future revision of the "Mining Act" by the Guinean government. At the same time, it plans to invest huge sums of money for the construction of mines and related infrastructure.
According to the statistics, the Simandu project is one of the top tier iron mines in the world that has not yet been developed. After the project is put into operation, it is estimated that 70 million tons of high-grade iron ore will be produced each year and will give priority to the needs of the Chinese market. Rio Tinto stated that after the signing of the agreement, it will make every effort to produce the first batch of iron ore at the end of 2014.
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