WA Today reported that Rio Tinto's grip on the Simandou iron ore project in Guinea remains unchanged despite the West African nation introducing a new mining code under which the state can take as much as 35% of projects, up from 15% previously but the change does raise questions over BHP Billiton's iron ore and alumina ambitions in the country.

Rio Tinto had previously agreed to a 35% upper threshold for the state when it paid USD 700 million to Guinea's Treasury. The facilitation payment by Rio Tinto came with an acknowledgment that Guinea had the right to take up to a 35% interest in Simandou, including 15% at no cost. Rio Tinto is partnered in Simandou by its 9% shareholder China's state owned Chinalco and the World Bank Group arm International Finance Corporation.

BHP Billiton has an interest in the Nimba iron ore deposit in Guinea in a joint venture with US gold group Newmont, a willing seller of its interest at the right price. But BHP Billiton has been cool on advancing Nimba for several years, with the previous government's intervention at Simandou and the prospect of the more onerous mining code - the likely reason.

That also goes for BHP Billiton's alumina joint venture in Guinea, where expenditure has all but stopped on a USD 5.2 billion project on which it and its Canadian and Middle Eastern partners have spent more than USD 700 million on preparatory works. The project has been officially deferred by BHP Billiton.

(Sourced from watoday.com.au)