Guinea Threatens Rio Tinto Over More Rights To Simandou-Report

23rd Jun 2010 08:25

LONDON (Dow Jones)--The government of Guinea has raised the stakes in its dispute with Rio Tinto PLC (RTP) by threatening to strip the Anglo-Australian mining group of more of its rights to one of the world's largest undeveloped iron ore deposits, The Financial Times reports Wednesday citing a government letter. Officials in Guinea's military-backed government have been angered by Rio's failure to acknowledge an earlier administration's decision in 2008 to reclaim the rights to half of the Simandou deposit. A letter sent to Rio Monday from the office of the outgoing president, General Sekouba Konate, which was obtained by the Financial Times, warns the company "If you persist in not respecting the decisions legally taken by the public authorities of our country, we will regrettably have to apply the full force of the law." In 2008, Guinea stripped Rio of Simandou's blocks one and two, accusing the group of taking too long to develop a mine and violating the terms of its exploration right at least twice, the newspaper reports. Rio retained the right to blocks three and four but the letter warned that the government could use the mining code to reclaim block three as well, the newspaper said. Rio declined to comment, the newspaper added. Rio maintains it has rights to blocks one and two and has been pressing its case for a restoration since the rights were awarded to a group controlled by Beny Steinmetz, a billionaire Israeli diamond trader. Rio is developing the Simandou iron ore deposit in conjunction with its joint venture partner Aluminum Corp. of China Ltd. [2600.HK] or Chinalco. Newspaper website: http://www.ft.com -London Bureau, Dow Jones Newswires; +44 (0)20 7842 9330 (END) Dow Jones Newswires June 23, 2010 03:25 ET (07:25 GMT)