Guinea tells Rio to give up Simandou fight: report

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Guinea has told Rio Tinto Ltd to give up its battle to retain concessions on the $6 billion (R46 billion) Simandou iron ore project, saying the global miner was destabilising the West African country, the UK’s Times newspaper reported on its Website.
Guinea last year gave the rights to a portion of Rio’s Simandou concession to BSGR, a firm owned by an Israeli diamond trader, which has no history of producing iron ore.
In a letter to Rio dated June 26, Guinea’s mines and energy minister Mahmoud Thiam said: “We regret to observe that Rio Tinto seems to ignore this sovereign decision from our Government with a doggedness verging on defiance of the authority of the State,” the Times reported.
It said the letter went on to accuse Rio of a campaign against the government, with the letter adding that “such activities come dangerously close to destabilising civil peace and weakening our socio-economic balance.”
Rio has spent $450 million (R3472 million) on exploration at Simandou and considers it the world’s largest undeveloped iron ore deposit.
The newspaper said Rio Tinto rejected the allegations.
“Rio Tinto has in all its actions, public statements and letters to the Government of Guinea indicated its desire to conduct good-faith discussions. Rio Tinto is confident of its strong legal standing as well as the win-win nature of our agreements with Guinea for the development of this project. We remain optimistic about the findings of any fully independent review of the Simandou issue,” the company was quoted saying.
The row with Guinea comes on top of Rio’s confrontation with China over the arrest of four employee`s detention on suspicion of spying during iron ore contract negotiations.
Rio’s spokesperson in Melbourne was not immediately available for comment.
Rio’s shares last traded up 1.9 % at $56.85 (R439), defying a 0.3 % fall in the broader market.