26 April 2011

Guinean govt., Rio Tinto sign iron ore mining agreement

The Guinean government and the mining company, Rio Tinto, have signed a new contract, worth US$ 700 million, under which Rio Tinto is licensed to mine for iron ore in the West African country.

Under the agreement, Simfer S.A (Simfer), a subsidiary of Rio Tinto, is empowered to prospect for iron ore with a view to having the Guinean government export its first set of the product by by mid-2015.

The new Guinean authorities had threatened to cancel the former contract with the mining giant, citing the inability of the company to invest in the country since it arrived in the country over a decade ago.

"Simfer will make all reasonable efforts to achieve a first production by the end of 2014", the communiqué quoted the company officials as saying.

On its part side, Simfer SA will pay US$ 700 million to the Guinean Public Treasury following a  presidential decree granting it a mining concession.

The Guinean government will hold a 35 percent share in the deal.

Rio Tinto is an international mining group whose headquarters are in the United Kingdom

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