Rio Tinto pushes ahead with Guinea mega mine no matter writedown

Rio Tinto (RIO.L) will are seeking for financing for its huge Simandou iron ore challenge in Guinea, regardless of writing down its price because of low commodity charges and funding uncertainties.

the arena's No. 2 miner on Thursday reported a net loss of $866 million remaining year, hammered in big part by means of a $1.1 billion writedown of the $20 billion Simandou task, considered the arena's biggest untapped iron ore deposit.

but Rio Tinto, buyers and advisers said this will no longer obstruct the hunt for funding or the timing of the undertaking, that can have a chief impact on Guinea's flagging economic system.

"that is simply an accounting adjustment," stated Rio Tinto's Alan Davies, president of the Simandou assignment. "state-of-the-art decision has no impact at the timing of the task."

Simandou contains an iron ore mine in crucial Guinea, a 650-kilometer (404-mile) railway and a deepwater port at the West African united states's Atlantic Coast. Its improvement already entails a number of global traders and builders.

At complete production, expected at around 100 million tonnes of iron ore a 12 months, Rio said the mission will generate approximately $7.5 billion in revenues, in step with a 2014 report. it would add $five.6 billion to Guinea's GDP, Rio stated, making Guinea the quickest developing financial system in the global.

Guinean President Alpha Conde is relying on the challenge as a boost for Guinea's budget.

"The cost of Simandou makes it an vital possibility for investors," Guinea's ministry of mines and geology stated in a assertion. "The Guinean government is fully assured within the success of the mission."

everything now relies upon on funding for the task, whose economics are much less sure now that commodity prices are in a trough. Iron ore expenses .IO62-CNI=SI are near multi-yr lows, knocked via waning call for in China and a marketplace glut.

Rio said it'll present a feasibility study in may, outlining the fee of the project and investors will then make a decision. until then, the timing of the mission is doubtful.

"As a long way as i am aware, the undertaking maintains and the accounting need to now not have something to do with the project," said Stephane Brabant, attorney at Herbert Smith Freehills who has advised at the undertaking.