Chinese buy world's largest mining project
World number two miner Rio Tinto is exiting the world's largest mining project, by selling its stake in Guinea's Simandou iron ore to partner Chinalco, potentially opening up a new path to development for the $20 billion project.
According to a statement by Melbourne-based Rio the deal is worth between $1.1 billion and $1.3 billion payable when Simandou starts commercial production and based on output. Rio says a final agreement could be inked within six months. In February this year Rio wrote down the value of Simandou by $1.1 billion, before deciding to shelve the project.
Rio owns 46.6% of Simandou south; Chinalco's stake is 41.3% and the Guinea government holds 7.5%. Earlier this month the World Bank's financing arm – the International Finance Corporation – sold its its 4.6% interest.With complete control, Beijing-based Chinalco may revive the stalled project with the backing of the Chinese government..
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