CAPE TOWN Feb 4 Guinea's review of all mining
contracts will include an effort to integrate a 2011 settlement
struck with global miner Rio Tinto with an original
agreement signed with the company, Mines Minister Mohamed Lamine
Fofana said on Monday.
Rio Tinto, the world's second-largest iron ore miner,
initially controlled all of Guinea's Simandou deposit, one of
the largest untapped iron ore deposits in the world.
The West African country's government ousted Rio Tinto from
the northern part of the Simandou deposit in 2008. Under a 2011
settlement, the company secured permission to mine the southern
half after agreeing to pay $700 million and give the government
the right to up to 35 percent.
Fofana emphasised that there would be no revision of the
2011 deal, but said the review would incorporate it with the
agreement that first allowed Rio to develop the ore body.
"This accord has to be integrated with the initial framework
agreement. To do that, we need to have discussions, and this is
what the committee are doing, in order to make the necessary
changes to the framework agreement," Fofana told Reuters on the
sidelines of an African mining conference.
Fofana said there were "constant discussions" with Rio.
Company officials were not immediately available to comment.
Guinea's government, under President Alpha Conde, has moved
to overhaul the country's mining code and has set up a technical
committee to review existing natural resources contracts,
particularly those signed during the 2008-2010 period, when the
country was ruled by a military junta.
Guinean officials said last year that the review would focus
on three of the largest contracts, including a deal signed by
BSG Resources (BSGR) - part of billionaire Beny Steinmetz's
business empire - to obtain the northern half of Simandou.
That project was put on hold last year as BSGR partner Vale
cited uncertainties in regulation. Worries over the
government's intentions have prompted BSGR to say it would
consider all legal options to avoid expropriation.
Fofana, the mines minister, denied BSGR was being targeted.
"I do not understand why BSGR is stigmatised. For us, they
are like any other mining project developing in Guinea.
"We do not discriminate, we do not differentiate between
BSGR and any other company. The review concerns all companies
... there are no exceptions," Fofana said.
Guinea officials have said they expect to complete the
review of the BSGR contract in the first quarter, but Fofana
declined to comment on the timing or a potential outcome.
"We need to wait for the outcome of the review. For now,
there has only been an exchange of documents," he said, denying
there had already been offers to seek alternative investors.
The government is separately in talks to seek financing for
its portion of the infrastructure associated with Rio's portion
of Simandou. Fofana said there were "fruitful" contacts with
financing institutions, but declined to comment further.