Rio Tinto Group said it would be interested in regaining control of disputed iron-rich ground in Guinea it was stripped of in 2008, prompting the recipient of the land to claim Rio has no viable plan for its development.
“We know that there’s iron ore there and clearly that could be attractive to us depending on how it was offered,” said Rio Chief Executive Officer Sam Walsh, who was head of the company’s iron-ore unit at the time the project was seized and subsequently given to a business linked to Israeli billionaire Beny Steinmetz. “If it were attractive, we’d be interested.”
Rio is the world’s biggest exporter of the steelmaking material after Brazil’s Vale SA and recently reported first-half earnings from its iron-ore division of $4.3 billion. It has previously described Guinea’s Simandou deposit as the world’s best untapped iron-ore resource. The West African nation has said the Simandou development may cost $20 billion to build. Rio currently owns two of four blocks of land at Simandou, having previously controlled the entire deposit. It was ordered by the government in 2008 to hand over the northern half to Steinmetz’s BSG Resources Ltd.
In April 2010, Vale agreed to pay BSGR as much as $2.5 billion for deposits in the country including Rio’s confiscated assets. The Simandou blocks 1 and 2 were legally stripped from Rio because the company failed to proceed with development, other than drilling six holes over 13 years, BSGR said. “Rio is not interested in developing these assets, they want to prevent others from doing so in order to maintain a competitive advantage,” BSGR President Asher Avidan said in an e-mail. Rio’s mining project isn’t commercially viable, he said.