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Rio says still lacks funding for huge Guinean iron ore project

Published 04/08/2016, 02:54 am
Updated 04/08/2016, 03:00 am
© Reuters.  Rio says still lacks funding for huge Guinean iron ore project

LONDON, Aug 3 (Reuters) - Rio Tinto's RIO.AX RIO.L CEO said on Wednesday there was no progress for now on finding infrastructure financing for the massive Simandou iron ore project in Guinea even after more than 200 meetings with possible backers.

Simandou could have a major impact on Guinea's flagging economy, although iron ore prices are likely to remain under pressure in a global market expected to stay oversupplied for the foreseeable future.

The $20 billion Simandou project comprises an iron ore mine in central Guinea, a 650-kilometre (404-mile) railway and a deepwater port on the West African country's Atlantic Coast.

CEO Jean-Sebastien Jacques, who took office at the start of July, said the deposit was undoubtedly world class and Rio had been working to lower project costs through, for instance, a voluntary redundancy scheme.

"We have been discussing with many parties including the Chinese on how we could finance the infrastructure. I think we had more than 200 meetings globally and today there is no secure pathway in relation to the financing," he told reporters in London.

"It doesn't mean that we won't have it in three months or six months or one year or two years."

In May, Rio Tinto submitted feasibility studies to the Guinean government for the Simandou project, considered the world's biggest untapped iron ore deposit. fully operational, Simandou has the potential to double Guinea's GDP, while China, the world's largest iron ore consumer provides an obvious market.

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