* Rio sets out stance in letter to government minister
* Letter says civil action over Simandou is claim for
* Not seeking reinstatement of Simandou permits
By Silvia Antonioli
LONDON, May 14 Rio Tinto accepts
Guinea's decision to reissue the rights to half a giant iron ore
mine that it once held, two sources close to the matter said,
clarifying the miner's stance ahead of a new auction for the
Exploiting Simandou, one of the world's most valuable iron
ore deposits, could help Guinea to prosper. But development of
the deposit in one of Africa's poorest countries has been
severely hampered by battles over the mining concessions.
Australian miner Rio last month sued competitor Vale
, Israeli billionaire Beny Steinmetz and BSG Resources
(BSGR) alleging they had devised a fraudulent scheme to steal
its rights to part of Simandou in 2008.
Steinmetz and the mining branch of his business
conglomerate, BSGR, has rejected Rio's claim, while Vale has
declined to comment.
In a letter sent on Monday to Guinea Minister of Mines
Yansane Kerfalla, Rio said the civil action was purely a damages
claim and not an attempt to reinstate the mining titles it lost
over blocks 1 and 2, the northern half of the deposit, the
The miner, which is focusing on developing the southern part
of Simandou with Chinese partner Chinalco, said it
would not challenge anyone who acquired those titles, the
Rio, the world's second-largest diversified miner by market
value, declined to comment.
The West African country plans a new auction to reissue the
permits, but the possibility of legal claims from companies that
previously held these rights risks curbing interest in the sale.
"The letter was sent because Guinea insisted that Rio
clarify their attitude towards the coming tender...reaffirm all
their agreements with Guinea, and will work cooperatively with
who ever wins the tender, even if it's Vale," a source close to
the Guinean government said.
Guinea's President Alpha Conde has said Vale was not
involved in the alleged corruption and would be welcome to bid
to reclaim permits, previously owned by Rio, that it lost last
Guinea stripped BSGR and joint venture partner Vale of their
rights, saying it had found BSGR obtained the rights through
corruption - a charge BSGR denies.
Rio said it spent hundreds of millions trying to develop
Simandou until 2008, when former President Lansana Conte's
government revoked its permit on the northern half and
transferred it to BSGR, arguing that Rio had moved too slowly.
In the letter, Rio said it was committed to develop the
southern part of Simandou in a timely manner.
It also invited any new holder of the titles over the
northern part to invest in infrastructure, the sources said.
(Editing by Erica Billingham)