Rio Tinto: Still Committed To Guinea Simandou Iron Ore Project

BEIJING, June 1 -- Rio Tinto PLC and Aluminum Corp. of China separately said Tuesday they were still committed to the Simandou iron ore project in Guinea, despite a maneuver by Brazilian rival Vale S.A. to wrest control of the West African asset from the Anglo-Australian miner's joint venture with the Chinese company, also called Chinalco.

"We're still committed to the Simandou project, (and) still fully committed to the memorandum of understanding and the joint venture with Chinalco," Rio Tinto spokesman Gervase Greene told Dow Jones Newswires.

"We're still working on the details on developing Simandou under the joint venture," said Lu Youqing, vice president of Chinalco.

In a report Monday, the China Land and Resources Newspaper, the official publication of the Ministry of Land and Resources, said Vale was now directly competing with Rio Tinto in the race for Simandou, potentially one of the world's three largest iron ore sites.

Rio Tinto signed a nonbinding memorandum with Chinalco in March for a $1.35 billion deal to develop Simandou. But in late April, Vale spent $2.5 billion for a 51% stake in BSG Resources, which holds rights to develop Simandou.

Opposition politicians in Guinea recently disputed Vale's right to develop the resources. Rio Tinto won development rights in 2003 to Simandou, which holds 2.25 billion metric tons of the steelmaking material, but the Guinean government terminated Rio Tinto's license and gave it to Israeli diamond merchant Beny Steinmetz, who owned BSG Resources, according to the report.