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Reuters

CONAKRY – Guinea’s ruling junta has ordered the cessation of all activities at the massive Simandou iron-ore deposit owned by Rio Tinto and a Chinese-backed consortium, saying it was seeking clarification on how Guinea’s interests will be preserved.

Simandou, in Guinea’s remote south-eastern corner, is the largest known deposit of its kind, holding more than two-billion tonnes of high-grade ore, but its development has been stalled by protracted legal disputes and the cost of infrastructure.
In a statement read on national television late on Thursday, Guinea’s interim government said interim president Mamady Doumbouya, who took power in a military coup in September, had not seen progress towards developing the long-stalled project.

“He therefore ordered the cessation of all activity on the ground pending the answers to questions posed to various actors and the clarification of the operational mode by which the interests of Guinea will be preserved,”

said government spokesperson Ousmane Gaoual Diallo.
Mining and exploration firms in Guinea had said after the September coup that their activities were unaffected and that the new leaders had taken a positive tone on mining.

The junta said shortly after seizing power it would “respect all its obligations related to mining agreements”.

THE ‘TRANSGUINEAN’
Rio Tinto owns a 45.05% stake in Blocks 3 and 4 of Simandou. Aluminium Corp of China (Chinalco) holds 39.95% and Guinea’s government 15%.

Blocks 1 and 2 have been controlled by Chinese-backed consortium SMB-Winning since November 2019. It is developing the mine and associated infrastructure through a company called Winning Consortium Simandou (WCS).

Rio Tinto, WCS and Chinalco did not immediately respond to requests for comment.

A source at Guinea’s mines ministry told Reuters the government was hoping Rio Tinto and WCS would reach an agreement to “work together”.

It is still unclear whether or how the two companies will share use of a 670-kilometre “Transguinean” railway being built to get Simandou ore to market.

Guinea’s government has said any developer of the mine must build the railway spanning the country, even though it adds significantly to the cost of developing the mine and the route to port through neighbouring Liberia is much shorter.

Rio Tinto has previously said it would collaborate with those building the infrastructure, and CEO Jakob Stausholm said in October he saw the development as one integrated project.

In an update on the Simandou project released last month in its 2021 financial results statement, Rio said it continued to engage with key stakeholders including the government of Guinea, and construction and early development works were expected to be carried out this year.

A Reuters investigation in August last year found WCS started blasting a railway tunnel in a habitat for critically endangered chimpanzees with no plan in place to manage the impact on the animals. 

Rio declined to comment on the construction works at the time, saying its railway solution was still under study.

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