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UK Serious Fraud Office investigates Rio Tinto Guinea project

West Africa – The United Kingdom’s Serious Fraud Office has launched a staid investigation into mining giant Rio Tinto for what is referred to as “suspected corruption” surrounding the exploration of the world’s biggest untapped iron-ore deposit in the west African nation of Guinea.

Rio Tinto desire to mine the massive Simandou iron ore deposits deep in the isolated interior of the poor west African country –– a project valued at US$20-billion have been mired in legal disagreements and partisan turmoil for years.

Sources say Rio Tinto told regulators last November about a US$10.5 million in payments made over the project after the completion of an internal probe.

In a release late Monday, Britain’s fraud investigators stated: “The SFO has opened an investigation into suspected corruption in the conduct of business in the Republic of Guinea by the Rio Tinto group, its employees and others associated with it.”

Rio Tinto CEO Jean Sabastian Jacques

Rio Tinto said Tuesday that it would “fully co-operate with the Serious Fraud Office and any other relevant authorities, as it has done since it self-reported in November 2016.”

The company first secured exploration rights to Simandou in 1997 and has been working on ways to begin significant operations.

In 2014, the company closed a US$20 billion deal with a Chinese consortium led by state-run aluminium group Chinalco to develop Simandou, which would have been Africa’s biggest-ever mining and infrastructure venture in history.

The company began its internal investigation after it became aware last August of email correspondence from 2011 relating to the payments “made to several consultants that provided advisory services” for the project.

In October last year the company announced the sale of its 46.6 percent holding to Chinalco, which previously held a 41.3 percent stake in the project.

Few weeks later, the company also notified US, British and Australian regulators of its internal investigation. The Anglo-Australian firm which is listed on both London and Sydney’s stock exchanges, is the world’s second-largest miner.

Amid these allegations, the company fired two executives — energy and minerals head Alan Davies and legal affairs chief Debra Valentine — following its internal probe.

While the current investigation may have no effect on the company’s market share, the mining giant shares fell 0.24 percent to Aus$62.47 in mid-day trading Tuesday in Sydney.

 

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Michael Harrington

Michael Harrington is a researcher and senior contributing reporter with Globe Afrique Media.

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