October 12, 2008

IFC increases investment in Simandou iron ore project

It is reported that World Bank’s IFC is increasing its investment in Rio Tinto’s Simandou iron ore project in Guinea to continue funding exploration and feasibility studies and to support its environmentally and socially sustainable development.

IFC has approved an additional USD 30 million investment in Rio Tinto’s Guinean project company Simfer SA to maintain the 5% shareholding it acquired in 2006.

Mr Somit Varma director of IFC for Oil, Gas, Mining, and Chemicals said that “By increasing our investment in the project, IFC is continuing a close relationship with Rio Tinto to benefit Guinea and its people. The Simandou project has the potential to make a large, positive contribution to the country’s economy for many years and the infrastructure associated with the project will help attract further private sector investment to the region.”

Mr Mike Harris MD of Rio Tinto Iron Ore Atlantic said that “IFC has considerable expertise and experience in projects like Simandou, particularly in maximizing the development benefit for local communities. Working with IFC will enable us to increase jobs, improve infrastructure and have a positive impact on the economy of surrounding areas.”

IFC has been working with Rio Tinto on biodiversity, conservation, community development, and supply chain linkages between the project and local entrepreneurs. IFC’s involvement will support Rio Tinto and the Guinean government in conducting feasibility studies, environmental and social assessments, and ore transportation evaluations. IFC, the World Bank, and the government, have also conducted a broader study on best practice community development standards in the country’s mining sector. The study will be published soon, and the recommendations will be implemented shortly thereafter.