Rio Tinto and its partners have been ordered by Guinea Mines Minister Moussa Magassouba to suspend work at the Simandou project, marking a fresh setback in the efforts to develop the long-stalled iron ore project.
This project is being developed by Rio Tinto’s Guinea subsidiary Simfer and the Chinese-supported consortium Winning Consortium Simandou (WCS).
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The order from Magassouba came into effect on 4 July 2022.
This decision comes as the project companies failed to extend the deadline to agree on a project joint venture (JV), Reuters reported citing a letter seen by it.
In a letter addressed to the project companies, Magassouba said the firms have shown a ‘lack of willingness’ to work on a partnership.
In a later statement, the government said it is considering talks with new partners in the Simandou iron ore project.
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By GlobalDataMagassouba wrote: “Despite the significant concessions the Guinean State has been kind enough to make, it is clear the obstruction is being maintained by both your companies, to the detriment of the interests of the project.”
In March 2022, Guinea’s ruling junta suspended construction work on the Simandou project, seeking clarification on how the mine would preserve national interests.
Subsequently, Rio and WCS signed a framework agreement with the government in the same month, to ‘co-develop’ infrastructure for the mine, including a 670km railway and a port.
On 19 June, the government gave 14 days for the project companies to agree on a JV. The time period itself marks an extension of a previous deadline.
Magassouba said Rio and WCS were stalling over the terms of the government’s interest in the JV.
Through its unit Simfer, Rio Tinto currently owns a 45% stake in Blocks 3 and 4 of the Simandou deposit whereas Chinalco and the Guinean Government respectively hold 40% and 15% stakes.
The SMB Winning Consortium controls Blocks 1 and 2 of the Simandou project.
