Rio Tinto and its partners now have under two weeks to finalise a joint venture regarding the Simandou iron ore mine in Guinea or risk losing their mining licences.
Guinea’s interim president Mamady Doumbouya held a meeting with the project partners, which include Rio Tinto and China-backed Winning Consortium Simandou, late last week, providing a 14-day ultimatum in the process.
“I expect the creation of the joint venture within 14 days,” Doumbouya said at the meeting, via a video which was posted online by his office.
“Since March 25, we have noticed a gap between our vision of the implementation of the terms of the framework agreement and our expectations.
“This situation is not only regrettable but, above all, unacceptable.”
Rio Tinto owns 45 per cent of Simandou’s southern half, blocks 3 and 4, with the Guinean Government holding 15 per cent and Aluminium Corporation of China the remaining 40 per cent.
After suspending all Simandou activities in early March, Guinea’s ruling junta gave Rio Tinto and Winning Consortium Simandou (which controls blocks 1 and 2) the green light to resume activities in late March.
This coincided with an agreement primarily focused on the development of a 670km railway connecting Simandou with a new deepwater port, set to cost about $US15 billion ($21.6 billion).
While Rio Tinto was first granted an exploration licence for Simandou in 1986, the project’s development has been plagued with obstacles, with political complexities, cost concerns and mining rights disputes getting in its way.
If Rio and its partners got the project up and running, it would be the largest iron ore project of its kind in the world. Once developed, the major miner’s share in Simandou has the potential to produce more than 100 million tonnes of iron ore a year.
To put that into perspective, Rio Tinto shipped 321.6 million tonnes of iron ore in 2021, derived from 16 mines in the Pilbara region of Western Australia.