Rio Tinto Group, seeking to build a more than $10 billion iron-ore operation in Guinea, should aim to complete a long-awaited investment agreement for the project this year, according to the African nation’s new mines minister.
“I wish the project could be operational yesterday or the day before yesterday,” Kerfalla Yansane, who was switched to the role from finance minister last month, said today in an interview in Cape Town. “As partners, we have to work to solve these problems.”
Rio Tinto, which has brought in Aluminum Corp. of China as a partner in the project, has had an interest in the iron ore-rich mountain range at Simandou since 1997. The world’s second-biggest mining company has previously said it would seek to complete an accord in late 2014 or early 2015, with first production by 2018.
The project to tap the world’s largest undeveloped iron-ore deposit has been stalled by political instability in the West African country that culminated in London-based Rio being stripped of half of the project in 2008. Development of the mine has the potential to double the country’s economy, Rio said yesterday.
“I would like to be a man of solution and not a trouble maker,” Yansane said. He is optimistic about the mining industry’s contribution to Guinea’s economic development and plans an “open dialogue” with the biggest investors in the country, which include Rio and United Co. Rusal, the world’s largest aluminum producer. Guinea is the leading exporter of bauxite, the main ingredient in aluminum.
Yansane has taken on the role at the same time as a government-led review into ownership of the portion of Simandou not owned by Rio nears completion. BSG Resources Ltd., Israeli billionaire Beny Steinmetz’s mining company, had planned a $10 billion iron-ore operation with Brazil’s Vale SA in Guinea, before the review halted its development plans.
The review of the Vale-BSG license should also be completed this year, Yansane said. A spokesman for London-based Rio declined to comment.