THE pressure is on the partners given the greenlight to develop the Simandou iron ore mine in Guinea, according to a report by Bloomberg News.
It said on Monday the West African country had given the partners, which includes Rio Tinto, a 14-day ultimatum to form a joint venture and start the project.
The partners, which also includes China-backed SMB-Winning Consortium and the government must ensure that funding for the project requiring $15bn investment is “effective,” the head of Guinea’s ruling military junta, Colonel Mamadi Doumbouya, said at a meeting with miners broadcast Saturday on state-owned Radio Television Guineenne.
“Since March 25, we have noticed a gap between our vision of the implementation of the terms of the framework agreement and our expectations,” Doumbouya said. “This situation is not only regrettable but above all unacceptable.”
Simandou is the world’s biggest untapped iron ore resource. Rio Tinto and Aluminum Corporation of China, known as Chinalco, hold blocks 3 and 4 while blocks 1 and 2 are controlled by the Winning Consortium, said Bloomberg News.
Simandou has remained undeveloped owing to the difficulty of exporting the material. In terms of a framework agreement signed between the partners in March, a new 670km railway should be built from the mine to a deep water port for $15bn.
The government had negotiated and obtained 15% stakes in the rail, port and mines, while the new infrastructure would become Guinean state property upon completion.