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Business

Rio Tinto asks junta to honour iron ore deal

Latest update : 2009-07-14

The Anglo-Australian mining group Rio Tinto has called on the new military leadership of Guinea to honour an existing $6 billion iron ore deal. The junta has vowed to freeze the mining sector and renegotiate contracts after it seized power last week.

AFP - Mining giant Rio Tinto has called on the new military leadership of Guinea to allow a six billion US dollar iron ore mine to go ahead, and said Monday it was seeking a "good faith" meeting with the junta.

Rio Tinto said it has invested 450 US million dollars to date in developing a long-life iron ore mine at Simandou in Guinea's south.

New military leader Captain Moussa Dadis Camara has vowed to block the mining sector and renegotiate contracts after seizing power last week following the death of president Lansana Conte.

Rio spokesman Jordan Feilders stood by the project, for which the Anglo-Australian miner was granted a mining concession by the government in 2006, and called on Camara to honour the agreements.

"Rio Tinto negotiated its agreements in full transparency, believes that these contracts present a win-win situation for Guinea, and thus maintain that our agreements should be upheld," Feilders told AFP in an email.

"We will initiate good faith contact with the new authorities in order to answer any questions."

The project office in Guinea's capital Conakry was to reopen Monday after a week-long shutdown.

The project, in which the World Bank has a five percent stake, is in the final feasibility stages.

Mine construction is expected to begin in 2010, and mining forecast to start in 2013. Capital investment in the mine and related infrastructure is estimated to top six billion dollars, Rio Tinto said.

More than a third of the world's bauxite reserves are located in Guinea, making it the second-largest producer internationally after Australia and the world's biggest exporter.

It also has large reserves of gold, diamonds, iron and nickel, while uranium deposits were found at various sites in 2007.

Date created : 2008-12-29

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