[miningmx.com] — RIO Tinto has approved an additional $1.3bn of funding for its Simandou iron ore project in Guinea, accelerating development of the mine and pressing ahead with plans that will see the first shipment of ore by mid-2015.
Rio said on Tuesday it had approved $211m for continued studies and $1.117bn for early works and the procurement of long-lead items, usually heavy machinery that often has to be ordered years in advance, even for major projects.
The additional funds bring the total amount spent or committed to the project by Rio to $3bn.
The miner, the world’s second-largest iron ore producer behind Brazil’s Vale, said work was progressing on obtaining regulatory approvals with its project partner, China’s Chalco, which will trigger the creation of a joint venture and an earn-in payment of $1.35bn.
The infrastructure investment framework for the project is expected to be finalised in early 2012, triggering the government’s requirement to contribute its share of infrastructure expenditure incurred to date. Of the $3bn spent by Rio to date, a third is infrastructure.
“This funding highlights Rio Tinto’s commitment to honouring the settlement agreement reached with the Government of Guinea in April this year, and maintains the rapid build-up of in-country infrastructure in order to deliver first shipments of ore by mid-2015,” Sam Walsh, Rio Tinto’s chief executive Iron Ore and Australia said.
