Hand in glove

Simandou is a world-class iron ore mining project in the West African nation. Rio Tinto was granted exploration rights to the area in 2006. Exploration results released in 2008 showed that Simandou contained iron ore reserves of up to 2.25 billion tons with a purity of 66 percent.

Since 2006, Rio Tinto has spent more than $650 million on exploration, environmental, community development and evaluation to develop the project. Current mining, railroad and harbor constructions are expected to create upwards of 10,000 jobs and will provide 4,000 full-time jobs once the mine becomes operational.

On August 2, Rio Tinto said on its website that it has advanced to the next stage of developing the world-class Simandou iron ore project, approving $170 million in further funding for mine, rail and port infrastructure work on top of the $650 million already spent.

The July 29 agreement follows a memorandum of understanding between Rio Tinto and Chinalco signed earlier in March. Following the formation of the joint venture, Rio Tinto's Simfer subsidiary will continue its supervision over the development of the Simandou project, and Chalco will provide personnel to dually manage and operate the project.

For the global mining giant and Chinese company, the joint venture is proceeding smoothly, but its establishment is waiting for the green light from the Guinean Government, and must be in line with Chinese and Guinean supervisory requirements.

But insiders believed the joint venture will not face regulatory obstacles as Guinean, Australian and British government officials were present at the memorandum signing ceremony on July 29.