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By Silvia Antonioli
LONDON, March 16 (Reuters) - Guinea expects to launch an auction for the right to develop half of the giant Simandou iron deposit as soon as next month, Mining Minister Kerfalla Yansane said on Monday, adding he expected great interest despite a steep fall in iron prices.
Top miners including Rio Tinto and Vale have sought to develop Simandou, the world’s biggest untapped iron ore deposit.
But analysts think low iron ore prices and lawsuits surrounding the deposit have diminished appetite. However, Guinea plans to go ahead with the auction.
“I‘m flying to Paris to finalise things with the lawyers and the auction could start as soon as next month,” the minister told Reuters at the Chatham House Extractive Industries in Africa conference.
The minister said he expected many participants would take part given the very high quality of the deposit.
“This is a long-term project,” he said.
Rio Tinto already holds the right to develop the southern half of the deposit, which could produce about 100 million tonnes of iron ore a year.
In the northern half, the government took back mining concessions from BSGR, the mining branch of Israeli billionaire Beny Steinmetz’s business conglomerate, and its joint venture partner Vale last year. A government panel said in a report it had found that BSGR had received the rights from the previous administration through “corruption”.
BSGR has rejected accusations of wrongdoing.
It has filed an arbitration request at the International Centre for Settlement of Investment Disputes (ICSID) in September against Guinea’s decision and has threatened to sue companies that invest in its former licence area.
On Friday, Vale transferred its stake in the Guinea joint venture to BSGR but said it was not renouncing its right to recover from BSGR at least part of the $1.1 billion it said it has lost in Guinea.
“This now allows us to take full control of the project once the ICSID process has confirmed our innocence and established the illegal nature of the Government of Guinea’s actions,” a spokesman for BSGR said.
Rio Tinto owned the rights to develop the northern half of Simandou before the concession was given to BSGR and last year sued Vale, Beny Steinmetz and BSGR over how they obtained the rights. (Editing by Jason Neely)