Guinean former Minister of Mines Mahmoud Thiam claims that the Rio Tinto Group will likely suspend its efforts to develop one of the largest sources of iron ore in the world because the country’s government cannot afford to invest in needed transportation infrastructure. Guinea is expected to come up with $5 billion, which is half the cost, and the country only had a GDP $12.25 billion in 2012.
Rio Tinto, however, says that the Simandou project will continue as planned. The company has already invested more than $2 billion in the project, which is scheduled to begin production in two years.
Minister Thiam may be one of the subjects of an investigation for being involved in the pay off of government officials so that BSG Resources, another mining company, could acquire the rights in 2010 to mine a portion of Simandou that previously was licensed to Rio Tinto. Several Guinean officials, therefore, are questioning his credibility as a source.
(Edited from an article by Bloomberg)