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involved at Simandou have been
convicted of corruption and/or other
related charges. Frederic Cilins, a
BSGR associate, served two years in
prison in the US for obstructing an FBI
investigation, while Mahmoud Thiam,
Guinea’s former minister of mines, who
backed BSGR’s deal with Vale, was
found guilty of laundering USD8.5-
million in bribes he allegedly took in
exchange for helping a Chinese company
secure mining rights. Asher Avidan, the
former head of BSGR in Guinea, is, like
Steinmetz, restricted in his travels, while
the Israeli police and prosecutors in the
US and Switzerland continue to circle.
In October 2016, Rio Tinto agreed to
sell its remaining stake in the Simandou
projects to Chinalco. However, in
November 2016, a few weeks after the
signing, two former employees were
found to have paid USD14.8-million
to French banker François Polge de
Combret — who shares a personal
relationship with Guinea’s president
Alpha Condé — for consultancy services
related to the project.
In addition, Rio Tinto’s former energy
and minerals chief executive Alan Davis
was suspended, and regulatory affairs
group executive Debra Valentine stepped
down after Rio conducted an internal
investigation that discovered emails from
2011 containing information related to
the consultant.
According to the statement, the
agreement between Rio Tinto and
Chinalco was, at the time, worth about
USD1.3-billion. The deal would have
seen Chinalco become the majority owner
of Simandou, increasing its stake from
39.95% to 85%. The Government of
Guinea holds a 15% stake in the project.
Almost 20 years after Simandou
was first discovered, the curse that has
plagued it from the very beginning, is
still hampering its progress. Simandou
was always going to be difficult to
develop considering its remote location,
but it remains one of the greatest
iron ore deposits in the world. Yet, its
development seems as far off as what it
was 20 years ago.
On its website, Rio Tinto describes the
Simandou Project as the largest planned
integrated mining and infrastructure
development contemplated in Africa.
It states that the project includes
three key components: the mine,
the infrastructure, and the ancillary
infrastructure. The mine would be
located towards the southern end of the
110km-long Simandou mountain range,
550km south-east of Guinea’s capital
city Conakry. According to Rio Tinto,
it is one of the largest undeveloped
high-grade iron ore deposits in the world
and the mine will be a conventional
opencast mine with an expected capacity
of 100 million metric tonnes of iron ore
per annum. The infrastructure would
include a new 650km trans-Guinean
railway line to transport iron ore from
the Simandou mine to a new deep-sea
The mine would be
located towards the
southern end of the
110km-long Simandou
mountain range, 550km
south-east of Guinea’s
capital city Conakry.
port, located south of Conakry on the
Morebaya River. Both rail and port will
be available for use by third parties, on
prescribed terms. Lastly, the ancillary
infrastructure includes access roads,
accommodation, power generation, and
water systems to directly support the
Simandou project.
Rio Tinto further states on their
website that a third-party infrastructure
consortium will fund, build, and own
multipurpose, multi-user rail and port
infrastructure. Rio Tinto’s investment
will be in the mine only, and as
such, will not be an investor in the
infrastructure consortium. Simfer S.A.
is a joint venture ultimately owned by
the Government of Guinea (15%), Rio
Tinto (45.05%), and a consortium of
Chinese state-owned enterprises led by
Chinalco (39.5%). Simfer S.A. is the
holder of the Simandou South mining
concession (blocks three and four)
located in south-eastern Guinea. b
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