Rio Tinto and Winning Consortium Simandou (WCS) have been ordered to “immediately stop all activities” at the Simandou iron ore project after missing their 14-day deadline to form a joint venture.
Guinea’s Mines Minister Moussa Magassouba called for the suspension, suggesting the two companies’ inactivity was detrimental to the project and its stakeholders.
“The Guinean State notes with regret the lack of will demonstration on the part of your two companies to favour a win-win partnership necessary for the co-development of the Simandou project,” Magassouba said.
The latest development comes after Guinea’s interim president Mamady Doumbouya held a meeting with Rio Tinto and WCS in mid-June, 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 that 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 WCS (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.