it's getting hot in west africa

Some very big numbers here.


http://www.bloomberg.com/news/2011-04-22/rio-tinto-guinea-sign-pact-for-iron-ore-project.html

Rio Tinto Will Pay $700 Million Under Guinea Iron-Ore Accord
By Angus Whitley and Bill Koenig - Apr 23, 2011 10:05 AM GMT+0800
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Business ExchangeBuzz up!DiggPrint Email . Photographer: Christian Sprogoe/Rio Tinto Group via Bloomberg
Rio Tinto Plc (RIO) said it will pay the Guinea government $700 million under a mining settlement in a bid to start iron ore shipments by mid-2015.

The Simandou project in the west African nation will require more than $10 billion of investment, Sam Walsh, chief executive officer of Rio?s iron-ore unit, said in a statement yesterday. The terms of the agreement won?t be affected by current or future mining reviews by the Guinea government, according to the statement.

Rio, the world?s second-largest mining company by sales, has said the project will demand tens of thousands of workers and will create 4,000 full-time jobs when production starts. The settlement between the London-based company and Guinea comes after President Alpha Conde ordered a drafting policy giving the country at least a one-third stake in mining projects.

The agreement ?gives us the certainty we need to allow us to invest and move forward quickly,? Walsh said in the statement. The Guinea government has the right to as much as 35 percent of the project, Rio said.

Rio has been involved in a dispute with Guinea since 2008, when the government ordered it to hand over part of the Simandou venture, a stake later acquired by rival Vale SA of Brazil. Rio said last month it had already spent $700 million on the project.

Rio runs the Simandou project through the company?s Simfer SA subsidiary. Rio has agreed to sell a 44.65 percent stake in Simfer to Aluminum Corp. of China Ltd., or Chinalco, as the state-owned company is known.

To contact the reporter on this story: Angus Whitley in Sydney at [email protected]

To contact the editor responsible for this story: Paul Tighe at [email protected]
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