Exclusive: Chinalco proposes taking entire Guinea Simandou iron ore mine

Mon May 15, 2017 10:01am EDT
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By Tim Cocks

CONAKRY (Reuters) - Chinalco has asked Guinea to let it take over the whole of the troubled Simandou iron ore mine project, sources familiar with the matter say, as Beijing pursues a global strategy to secure key resources for its vast economy for decades to come.

Mired in legal disputes, located in Guinea's remote interior and being planned at a time of depressed world prices, the mine has nevertheless attracted intense interest from China, the world's biggest producer and consumer of steel.

The Chinese state-owned miner's written proposal for Simandou, one of the world's largest untapped resources of high-grade iron ore used to make steel, seeks more favorable terms than laid out by the poor West African country's mining code.

In the most important concession, the firm has suggested the code could be altered to let it acquire all four Simandou blocks without competing in a public tender, according to one of the sources, who declined to be named.

For a graphic, click: tmsnrt.rs/2r8koEU

A spokesman for Chinalco had no comment on any aspect of its negotiations with Guinea, when asked about the project by Reuters.

In an interview with Reuters last week, Mines Minister Abdoulaye Magassouba declined to comment on Chinalco's proposal but said there was a possibility of it taking the whole concession.

"Everyone wants it all," he told Reuters. "Of course, they are free to express interest, but in the end we will make the decision on the basis of commercial negotiations."   Continued...

FILE PHOTO: An Aluminium Corp of China (Chinalco) company flag and the Chinese national flag are seen outside its headquarters in Beijing, China March 19, 2010. REUTERS/Christina Hu/File Photo