Rio Tinto has been granted an extension of three months in the dispute in Guinea over the Simandou iron ore concession. The Anglo Australian mining giant had invested in the largest undeveloped iron ore deposit in Guinea but has been in dispute over blocks 1 and 2 which were given to BSG Resources.
Rio Tinto paid $680 million to the government but the officials in Guinea refuse to grant it rights of the two disputed blocks saying that was already with BSG Resources. The mining officials have now given Rio Tinto three months to formally renounce the disputed areas of risk losing its entire stake in the mineral rich area.
A letter from the Guinean Ministry of Mines has been sent to Simfer, the Rio Tinto Subsiadary, granting an extension of existing exploration tenure for three months from February 24. This will give them time to examine an application for a replacement mining concession that the company has lodged with the government.
In the meanwhile the Brazilian company Vale, which is developing the blocks 1 and 2 on behalf of BSG Resources, had announced on Tuesday that iron production at the Zogota mine in the Simandou will begin in 2012.