MINING INDABA 2015: Rio extends Simandou rail investor deadline

Rio Tinto has pushed back the deadline for assembling a consortium of investors to fund the 650km rail line it needs to unlock its Simandou iron ore project in Guinea, due to the continuing ebola outbreak.

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A first quarter 2015 deadline to publish a pre-feasibility study for the mine will be missed after work on the mine development project ground to a halt after the deadly ebola outbreak last year.

The deadline to confirm infrastructure investors has now been pushed back to September 2015 .

“Are we on track for investor infrastructure [confirmation]? Not with ebola. We need a pre-feasibility study first,” Rio Tinto’s ceo, diamonds and minerals, Alan Davies told Steel First on the sidelines of the Mining Indaba conference in Cape Town on Tuesday February 10.

Davies said Rio Tinto understood the difficulties faced by international investors when weighing up whether to invest in Africa, but said the mining major had seen many cycles of boom and bust and that huge projects like Simandou measured their production stages ‘in decades, not years’.

Rio Tinto signed a landmark agreement with the Guinean government last April, outlining the investment framework for the development of blocks 3 and 4 of the Simandou iron ore project, the world’s richest known untapped iron ore deposit.

The framework agreement stipulated that investors for the multi-billion dollar rail project would be confirmed within 14 months of the signing of the agreement and that a pre-feasibility study would be published in the first quarter of 2015.

Rio Tinto said in December that work on securing investors was “progressing” having previously said that it was in talks with companies from Japan, South Korea, China and the Middle East regarding investment in the rail line and port.