* Rio to pursue Simandou rights compensation vigorously
* Rio Tinto sees Simandou production starting in 2018 at best (Adds Rio Tinto chairman comments, lawsuit details)
MELBOURNE, May 8 (Reuters) - Rio Tinto has a good relationship with the government of Guinea, its chairman said, however the company will pursue Brazil’s Vale and BSG Resources vigorously over the loss of its rights to half of the country’s massive Simandou concession.
Rio Tinto sued its bigger iron ore rival, Vale SA , Israeli billionaire Beny Steinmetz and his BSG Resources (BSGR) in April over the loss of rights to half of the Simandou concession, one of the world’s most valuable undeveloped iron ore deposits.
“What I want to emphasise is that we don’t have an issue with the government of Guinea at all. We have a good relationship with the government,” Rio Tinto Chairman Jan du Plessis told shareholders at the company’s Australian annual meeting on Thursday.
“But in parallel, we think that some of the things that happened back in 2008 were wrong and we intend to pursue ouur rights rather vigorously.”
Rio Tinto alleged in its lawsuit that the defendants devised a fraudulent scheme to steal its rights to the northern half of Simandou. BSGR obtained those rights after the government stripped Rio Tinto of those rights in 2008, accusing the company of having moved too slowly to develop it.
Rio filed its case after Guinea revoked BSGR and Vale’s rights over the northern half of Simandou as a government report had found that BSGR won those rights through “corruption”. BSGR has repeatedly said it was not involved in any wrongdoing.
BSGR, the mining branch of Israeli billionaire Beny Steinmetz’s conglomerate, said on Wednesday it has sought arbitration over the government of Guinea’s decision to revoke the rights.
Rio Tinto is working on finalising an investment framework for the long-delayed southern half of the Simandou project, now expected to cost $15 billion.
It expects first production in 2018 at the earliest, with a bankable feasibility study expected by early 2015.
Reporting by Sonali Paul; Editing by Richard Pullin