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Saturday, December 10, 2011

Rio urges Guinea to start transporting iron ore from Simandou project

Saturday, 10 Dec 2011

Reuters reported that Rio Tinto has proposed to the government of Guinea to start transporting iron ore from its Simandou project by trucks in 2015, while waiting for a planned railway so as to honor delivery contracts.

Mr Tom Albanese CEO of Rio Tinto said that "We have proposed this option in order meet the terms of agreements which provides for the delivery of the first tonnes of ore in 2015."

Mr Albanese said that over USD 1.1 billion has been committed for urgent studies on the 650 km railway to link the mine in the north to the west coast of the gulf of Guinea nation.

The global miner is ramping up infrastructure spending on the Simandou project, which it has said will see first shipment of ore by mid 2015.

Rio approved USD 1.3 billion of funding in October 2011, bringing taking total amount spent or committed to the project to USD 3 billion.

The miner, the world's second largest iron ore producer behind Brazil's Vale, has said work was progressing on obtaining regulatory approvals with its project partner, China's Chalco), which will trigger the creation of a JV and an earn in payment of USD 1.35 billion.

The infrastructure investment framework for the project is expected to be finalized in early 2012, prompting the government's requirement to contribute its share of infrastructure expenditure incurred to date.

Mr Albanese said that "Our priority is currently to develop our activities in the mine to allow meeting the deadline of 2015."

Mr Alan Davis, Rio's president for international operation, told the news conference that only after the feasibility studies would the firm be able to determine the actual cost of the railway.

(sourced from Reuters)

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