Guinea does not recognize Rio Tinto Group’s agreement to sell a $1.35 billion stake in the Simandou iron ore deposit to Aluminum Corp. of China Ltd., Mines Minister Mahmoud Thiam said.
The terms of the deal haven’t been disclosed to the Guinean government, Thiam said in an e-mail today. The Conakry-based administration must “approve any transaction or agreements,” he said.
Guinea, the world’s biggest bauxite producer, has been embroiled in a dispute with London-based Rio over the rights to the Simandou assets since 2008, when the West African nation began reviewing mining contracts.
Rio controlled the entire Simandou concession until Guinea ordered it to hand over blocks 1 and 2 in December 2008 to closely held BSG Resources Ltd. In April this year, Brazil’s Vale SA agreed to pay $2.5 billion for deposits in Guinea, including those blocks. Last month, Guinea told Rio it planned to take a 20 percent stake in blocks 3 and 4 at the project.
A spokesman for Rio said Guinean government approval is not a condition for the formation of the joint venture and that Rio continues to consult the government.
The Beijing-based aluminum company, known as Chalco, will acquire a 44.65 percent stake by funding development over the next two to three years, the companies said in a joint statement.