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CONAKRY, March 13 (Reuters) – Guinean authorities and
shareholders have agreed on the terms of a joint venture to mine
Simandou, one of the world’s largest deposits of iron ore,
paving the way for work to resume this month, the presidency
said on Monday.
Guinea’s transitional government ordered work to stop last
July to try to force the shareholders – which include Rio Tinto
China Baowu Steel (Baowu), and Winning Consortium Simandou (WCS)
– to agree on joint venture terms.
At the time, authorities said they needed clarification on
how the West African country’s interests would be preserved as
the companies tap into Simandou’s more than 4 billion tonnes of
ore.
All parties signed a shareholder pact for the La Compagnie
du TransGuinéen (CTG) joint venture on March 8, marking a
“crucial step” in negotiations between the Guinean state and
industrial partners, the presidency said in a statement dated
March 8, but tweeted on Monday.
The CTG guarantees the government 15% of the Simandou iron
ore as well as a free and non-dilutable 15% stake in railway and
port infrastructure.
It also reaffirms previously-stated commitments to
eventually open the railway to passenger services and other
users.
“Today marks the most important date in the development of
the Simandou project,” WCS representative Robin Lu said after
the signing ceremony, which was broadcast on state television
late on Sunday.
The Simandou project has been haggled over for years, its
exploitation delayed by legal wrangling and the difficulty and
cost of building infrastructure.
Rio Tinto representative Lawrence Dechambenoit said the
Simandou project had never come so close to fruition.
Under the CTG, Rio Tinto will finance half the project,
which has an estimated cost of between $15 billion and $20
billion. WCS will cover the other half.
Baowu’s representative in Conakry, Yang Gongyang, said the
CTG was “an important step for the Simandou project”.
The minister in charge of the presidency’s cabinet, Djiba
Diakite, said he was confident different viewpoints would
converge and called on all the industrial partners to take
necessary steps to ensure work resumes this month as planned.
(Reporting by Saliou Samb;
Writing by Anait Miridzhanian and Sofia Christensen; editing by
Barbara Lewis)
((Anait.Miridzhanian@thomsonreuters.com;))
Keywords: GUINEA MINING/ (PIX)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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