Rio Tinto has taken its embattled Simandou iron ore project to the next step, submitting its bankable feasibility study.
“The BFS outline the details around the development of both the world-class iron ore mine and the multi-user and multi-usage infrastructure project,” Rio Tinto said in an official statement.
“They are based on comprehensive analysis carried out over the past two years by Simfer, China Harbour Engineering Company (CHEC), China Railway Construction Corporation (CRCC) and other international mining and construction contractors.”
This is the first major movement for the massive two billion tonne iron ore project, located in Guinea, which has been embroiled in a long running legal battle over ownership.
It began when Rio Tinto claimed that BSG Resources stole the mining rights for Simandou blocks 1 and 2 in 2008 and later entered an agreement with Vale who had already obtained propriety knowledge, after Rio spent more than a decade and hundreds of millions of dollars in developing the site.
In its filed complaint, Rio stated that negotiations between it and Vale started in 2008, and Rio provided the information regarding Simandou.
It stated that “as Vale quickly surmised, gaining control of the Simandou deposit would strengthen Vale’s position in the world’s high-grade iron ore market, since the only other comparable source is Vale’s own Carajas Iron Ore Mine in Brazil”.
The miner went on to say Vale and BSRG “entered into a conspiracy to misappropriate Rio Tinto’s Simandou rights” and used a campaign of bribery to do so.
It stated that Vale and BSGR then paid a $200 million bribe to the Guinean minister of mines, Mahmoud Thiam, for his assistance in “unlawfully securing Rio Tinto’s Simandou rights”.
Following the revelation of this information, the Guinean Government revoked all of BSGR and Vale’s mining licences for both the Simandou and Zogota concessions in the country.
According to Dow Jones, Vale’s general counsel Clovis Torres said the miner may be willing to settle the case out of court, but “never as an acceptance of guilt.”
In an unusual turn BSGR then began arbitration with the International Centre for Settlement of Investment Disputes against the Government of Guinea and its president, Alpha Conde for stripping the company of the resource.
BSGR has also threatened to sue Rio Tinto and Vale if the miners continue to claim it carried out corrupt practices to obtain rights to the massive Simandou iron ore blocks.