Guinea can attract investment for Simandou infrastructure-president

ABU DHABI (Reuters) - Guinea’s president Alpha Conde on Sunday said he was confident of investor commitments to fund the costly infrastructure on the southern half of the giant Simandou iron ore mine, despite the project missing its production deadline.

Guinea's President Alpha Conde arrives for a meeting with Cambodia's Prime Minister Hun Sen at the Council of Ministers in Phnom Penh May 25, 2012. REUTERS/Samrang Pring

A much-awaited investment framework is expected to be concluded “very soon” paving the way for investments to flow in. “Interesting discussions are going on,” he told Reuters at the Guinea investors’ conference in Abu Dhabi.

The target for production was 2015, but that may be missed.

“Due to some delays that have taken place on the infrastructure work, it is likely that we will experience some delays,” Conde said without giving a timeline.

Simandou is one of the world’s largest untapped deposits of iron ore. The project’s development - along with associated rail and port infrastructure - could cost $20 billion or more and is expected to galvanise the region and turn Guinea into a major exporter.

Mining giant, Rio Tinto holds the concession for the southern portion of Simandou, while the north is held by the mining arm of Israeli billionaire Beny Steinmetz’s conglomerate, BSG Resources - along with Brazilian partner Vale.

Work on that side stopped last year after a review of the mining licence began. Rio Tinto and the government have for months been debating how to combine a 2011 settlement deal, which ended hostilities after Rio was ejected from Simandou’s northern portion in 2008, with an original investment agreement, while weighing up technical studies and the issue of financing - particularly for Guinea’s stake in infrastructure.

He declined to comment on corruption allegations against BSG Resources saying the matter is in the hands of the judiciary now. But when asked if there are other buyers lined up to take the licence, he said it is normal that all relevant miners and big players are interested de-facto.

Also, Conde advocated more transparency and a role for Britain.

“Guinea feels that transparency is a global matter, and therefore not just the UK, but also the U.S. and Canada, all should be involved to make sure the tenders are held internationally, in terms of transparency. The UK should definitely be involved, in that sense,” he said.

Conde said Rusal has committed to start operations again and needs to do some technical changes. “It is heavy cost for the government and we are keen to see Rusal finish technical adjustments,” he said.

Work has been halted at Rusal’s Friguia alumina refinery due to a strike over wages since April 2012.

Turning to politics, Conde who expressed confidence of securing a majority government in parliament for the presidential coalition said strikes and protests cannot continue as Guinea has turned a corner. The opposition has planned a strike for Monday.

“We now have a legislative process that has come to its conclusion. All forms of expressions should now take place in the assembly,” he said.

Reporting By Stanley Carvalho & Regan Doherty, editing by William Hardy