The Financial Times reported that Rio Tinto (NYSE:RIO) has struck a deal with the government of Guinea for a $20 billion iron ore development project. Rio Tinto plans to push ahead with the Simandou project now that its rights have been returned, according to the Times. The company’s mineral rights were previously stripped and sold to BSG Resources and Vale (NYSE:VALE).
As quoted in the press release:
Mr Yansané said the “tentative timeline” for first production was now the end of 2018. Rio’s backer in the project, Chinalco, a Chinese state metals company, was “very keen to see this project getting off the ground”, he said. The deal gives Guinea a free 15 per cent stake in the project while giving Rio and its partners an eight-year income tax exemption once the mine opens.