Sierra Leone Gist: The Chinese Are Taking Over

Rio Tinto and Chinalco have signed a non-binding agreement to sell Rio Tinto’s entire stake in the Simandou project in Guinea to Chinalco. The Heads of Agreement sets out the 

proposed principal terms of the sale with the aim of signing a binding agreement within six months.

Rio Tinto will receive payments of $1.1-1.3 billion based on the timing of the development of the project. The initial payment for shares will commence at the time of first commercial production, on a per tonne basis.

The Simandou project provides access to one of the world’s largest untapped (over 2 billion tonnes), high grade iron ore resources in the world. It can sustain a mine life in excess of 40 years and has the potential to make Guinea one of the world’s top iron ore exporters.