Rio Tinto PLC said it would pay the Guinea government US$700 million under a mining settlement in a bid to start iron ore shipments by the middle of 2015.
The Simandou project in the west African nation will require an investment of more than US$10 billion, Sam Walsh, chief executive officer of Rio’s iron-ore unit, said in a statement on Friday.
The terms of the agreement won’t be affected by current or future mining reviews by the Guinea government, according to the statement.
Rio, the world’s second-largest mining company by sales, has said the project will demand tens of thousands of workers and will create 4,000 full-time jobs when production starts. The settlement between the London-based company and Guinea comes after President Alpha Conde ordered a drafting policy giving the country at least a one-third stake in mining projects.
The agreement “gives us the certainty we need to allow us to invest and move forward quickly,” Walsh said in the statement.
The Guinea government has the right to as much as 35 percent of the project, Rio said.
Rio has been involved in a dispute with Guinea since 2008, when the government ordered it to hand over part of the Simandou venture, a stake later acquired by rival Vale SA of Brazil. Rio said last month it had already spent US$700 million on the project.
Rio runs the Simandou project through the company’s Simfer SA subsidiary. Rio has agreed to sell a 44.65 percent stake in Simfer to Aluminum Corp of China Ltd (中國鋁業公司).
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