UPDATE 2-Vale blames Guinea government for Simandou uncertainty

Thu Dec 6, 2012 2:11pm EST
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* Vale says still interested in Guinea

* Sees 1st tranche of oil and gas asset disposal in weeks

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* Says China's ban on Valemax ships costs it $2-$3 a tonne

By Clara Ferreira-Marques and Jeb Blount

LONDON/RIO DE JANEIRO, Dec 6 (Reuters) - Brazil's Vale , the world's top iron ore producer, has blamed a Guinean government U-turn on rail and port links and shifting, unclear regulation for its decision to shelve the giant Simandou iron ore project.

Vale said it remained interested in working in Guinea and at Simandou, site of the world's largest untapped deposit of iron ore, but needed clarity to proceed with the project. It stopped work on its part of the deposit in the spring and froze activity at the smaller Zogota project months later.

Both projects, which Vale is developing with BSGR, the mining arm of Israeli entrepreneur Beny Steinmetz's business conglomerate, have been shelved, raising questions about the their future as the government reviews mining contracts.

"We are still interested in being in Guinea. But we need clarity. We have shareholders, and we need to be transparent with them," Vale Chief Executive Murilo Ferreira said.   Continued...