Rio Tinto throws its weight behind £12.5bn iron ore development in Guinea
Bucking the trend: Rio Tinto will develop two blocks of the vast Simandou iron ore prospect in Guinea
Rio Tinto has thrown its weight behind a £12.5bn iron ore development in Guinea, bucking the trend for frugality among miners.
The FTSE 100 giant will develop two blocks of the vast Simandou iron ore prospect in the mineral-rich west African nation.
Rio will own nearly 47 per cent, with China’s Chinalco, the other major partner, on 41.3 per cent.
While miners have been hacking back their spending on new projects, Rio believes iron ore from Simandou will eventually feed into fast-growing emerging markets.
Iron ore is used to make steel, meaning it is typically seen as a play on economic growth and industrialisation.
The quality of Simandou ore is particularly high, meaning it can help firms in pollution-heavy economies such as China reduce their carbon emissions.
Guinean politicians said the entire project would cost some £12.5bn, but Rio has not said what its share of costs is likely to be.
Chinalco and Rio are seeking new investors to take on the cost of a 400-mile railway to transport iron ore from Simandou to the coast.
Rio (down 21.5p to 3236p) hopes to start production in 2018 but acknowledged it may take longer.
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