(Adds details, background)
DAKAR Oct 10 Mining giant Rio Tinto
said on Monday that the International Finance Corporation (IFC),
a partner in its $20 billion Simandou iron ore project in
Guinea, is selling its 4.6 percent stake.
The exit of IFC, an arm of the World Bank, is the latest
setback for the project to develop the world's biggest untapped
iron ore reserves. In July, Rio Tinto's new Chief Executive
Jean-Sebastien Jacques indicated the project had been shelved
temporarily due to a sustained slump in prices.
"We confirm that the IFC has exercised a put option, which
it has held since 2006, to require Rio Tinto and Chinalco to buy
their stake in Simfer," Rio Tinto said in an emailed statement,
referring to the joint venture.
Rio has a 46.6 percent stake in the project; China's
Chinalco has 41.3 percent and the Guinea government has 7.5
A senior official at Guinea's mines ministry said he was not
aware of the decision.
The West African country is counting on the project to spur
economic growth after Guinea was hit by a crippling Ebola
epidemic that officially ended in June.
When fully operational, Simandou has the potential to double
Guinea's GDP, the project partners have said, while China, the
world's largest iron ore consumer provides an obvious market.
(Reporting by Emma Farge; Additional reporting by Saliou Samb
in Conakry; Editing by Susan Fenton)