Chinalco, Rio Tinto Start Due Diligence on Guinean Mine

BEIJING, Mar. 29 -- Aluminum Corp of China, which is the country's largest nonferrous metal producer and is also known as Chinalco, and Australian mining company Rio Tinto have started the due diligence process for the Simandou iron ore project in Guinea, Xiong Weiping, general manager of Chinalco, said today.

Xiong, who is also president of Chinalco's listed unit, Aluminum Co of China Ltd, revealed that upon the completion of the due diligence process, Chinalco will decide when to launch a feasibility study for the project.

On Mar. 21, Chinalco signed a memorandum of understanding with Rio Tinto to jointly develop the Simandou iron ore project in Guinea, one of the most mineral-and metal-rich countries in Africa.

The two companies will set up a 47:53 joint venture. The JV will hold a 95% stake in the project, while International Finance Corp will own the remaining 5% of the project.

The annual iron ore output of the initial phase of the project is expected to be no less than 70 million tons. The two companies plan to set up a joint venture to sell the iron ore to China, according to an earlier report from China Knowledge.