Rio Tinto denies Guinea iron ore sale has stalled after investigation

Wed Feb 8, 2017 8:35am EST
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By Eric Onstad and Barbara Lewis

LONDON/CAPE TOWN (Reuters) - Rio Tinto (RIO.L: Quote) (RIO.AX: Quote) shrugged off concerns on Wednesday that its sale of Guinea's Simandou project to Chinalco 3668.HK had stalled after an investigation into payments to a consultant who helped it win rights to the huge iron ore deposit.

Rio signed a preliminary deal in late October to sell its stake in Simandou, the world's largest untapped iron ore reserves.

But the following month, the world's second-largest miner axed two of its top 10 executives amid a probe over $10.5 million in payments to a consultant providing advisory services on the Simandou project.

Rio has alerted U.S., British and Australian regulators about the payments, but there is no suggestion that the officials or consultant acted illegally.

China, the world's largest iron ore consumer, provides an obvious market for Simandou, but industry sources have questioned whether China would ever develop the project.

"Why do you say stalled?," Rio Tinto Chief Executive Jean-Sebastien Jacques said during a results conference call in response to a question.

"The two (negotiating) teams are working as we speak. The Rio team was in Beijing last week again and we'll be in China next week again."

Jacques declined to say if he was confident that Rio and Chinalco would finalize the deal within the original six-month timeframe.   Continued...

Jean-Sebastien Jacques, chief executive of Rio Tinto, poses for a portrait in London, Britain, February 8, 2017. REUTERS/Toby Melville