Rio Tinto looking to transport Simandou ore by road
While waiting for a planned railway, the global miner has suggested to the government of Guinea that it initially transport iron ore from its Simandou project by truck.
CONAKRY (Reuters) -
Rio Tinto has proposed to the government of Guinea on Wednesday to start transporting iron ore from its Simandou project by trucks in 2015, while waiting for a planned railway so as to honour delivery contracts.
"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," Rio's chief executive Tom Albanese, told a news conference in the capital of the West African nation.
Albanese did not say if Guinea has accepted the proposal.
Rio's CEO said over $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 $1.3 billion of funding in October, bringing taking total amount spent or committed to the project to $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 joint venture and an earn-in payment of $1.35 billion.
The infrastructure investment framework for the project is expected to be finalised in early 2012, prompting the government's requirement to contribute its share of infrastructure expenditure incurred to date.
"Our priority is currently to develop our activities in the mine to allow to meet the deadline of 2015," Albanese said.
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.
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