{"id":1130960,"date":"2019-08-06T05:54:23","date_gmt":"2019-08-06T10:54:23","guid":{"rendered":"https:\/\/www.mining.com\/?p=998517"},"modified":"2019-08-06T05:54:23","modified_gmt":"2019-08-06T10:54:23","slug":"guinea-extends-deadline-to-bid-for-vacant-blocks-of-giant-simandou-iron-ore-deposit","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1130960","title":{"rendered":"Guinea extends deadline to bid for vacant blocks of giant Simandou iron ore deposit"},"content":{"rendered":"<p>Guinea has extended a deadline to request<br \/>\ntender document for blocks 1 and 2 of the giant Simandou iron ore deposit, &nbsp;given<br \/>\nup by Israeli tycoon Beny Steinmetz earlier this year, in an effort to boost competition<br \/>\nfor one<br \/>\nof the world\u2019s most-fabled mineral deposits.<\/p>\n<div class='d-flex justify-content-center'>\n<div id='div-gpt-ad-1561499308230-0'><script>googletag.cmd.push(function() {googletag.display('div-gpt-ad-1561499308230-0');});<\/script><\/div>\n<\/div>\n<p>The West African country <a href=\"https:\/\/www.mining.com\/web\/guinea-seeks-developers-for-simandou-iron-ore-deposit\/\"  rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">launched the international tender in mid-July<\/a>, giving companies until Aug. 2 to outline their bids. Given the complexity of the process, however, the government has decided to allow more time for interested parties to prepare, an official close to the tender told Reuters on Tuesday.<\/p>\n<p>Potential bidders now have until Aug. 19 to withdraw the necessary documents to prepare their proposal and the new deadline for submitting the offer should be revealed soon, the source noted.<\/p>\n<p>At two billion tonnes of iron ore<br \/>\nwith some of the highest grades in the industry, Simandou is one of the world\u2019s<br \/>\nbiggest and richest reserves of the steelmaking material, but it has a<br \/>\ncontroversial&nbsp;past. <\/p>\n<p>For more than a decade, it was the<br \/>\ncentre of a bitter dispute that involved Rio Tinto, Brazil\u2019s Vale SA and<br \/>\nIsraeli diamond mining tycoon Beny Steinmetz.<\/p>\n<p>In 2008, one of Guinea\u2019s former<br \/>\ndictators stripped Rio\u2019s rights over two of the four blocks the deposit had<br \/>\nbeen divided on and handed them BSG Resources, the mining arm Steinmetz. Rio<br \/>\nwas able keep to the two southern blocks, but only after paying $700 million to<br \/>\nthe government in 2011. That guaranteed the miner tenure for the lifetime of<br \/>\nthe Simandou mine.<\/p>\n<p>That deal came under scrutiny in<br \/>\n2016, forcing Rio to&nbsp;<a href=\"https:\/\/www.mining.com\/heads-roll-at-rio-tinto-over-simandou-probe-davies-valentine-fired\/\"  rel=\"noreferrer noopener\">fire two senior managers<\/a> over a questionable $10.5 million<br \/>\npayment made to a consultant who helped the company secure the two blocks and<br \/>\nalerted authorities, including the US Department of Justice and the&nbsp;<a href=\"https:\/\/www.mining.com\/uk-serious-fraud-office-launches-probe-rio-tinto-simandou\/\"  rel=\"noreferrer noopener\">UK\u2019s Serious Fraud Office<\/a>.<\/p>\n<p>BSG Resources and Steinmetz were<br \/>\nalso subject of several investigations over&nbsp;<a href=\"https:\/\/mining.com\/guinea-government-to-strip-vale-bsgr-of-all-simandou-rights-97066\/\"  rel=\"noreferrer noopener\">bribery<\/a>&nbsp;and&nbsp;<a href=\"https:\/\/mining.com\/bsgr-may-pay-1-2bn-no-show-simandou-related-hearing\/\"  rel=\"noreferrer noopener\">corruption accusations<\/a>, but it was able to put an end to<br \/>\nand to all that in February this year, through a&nbsp;<a href=\"https:\/\/www.mining.com\/web\/steinmetz-stages-guinea-comeback-sarkozy-brokered-deal\/\"  rel=\"noreferrer noopener\">deal with&nbsp;Guinean President Alpha Conde<\/a>.<\/p>\n<p>As part of the agreement with Guinea, BSGR agreed to walk away from blocks 1 and 2 of the Simandou project, but retained the right to mine <a href=\"https:\/\/www.mining.com\/former-xstrata-boss-mick-davis-mine-guineas-zogota-iron-ore-deposit\/\"  rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">the smaller Zogota deposit<\/a>.<\/p>\n<p>A few weeks later, a London arbitral court told BSGR to pay $1.2 billion to Vale, its former partner Guinea, due to \u201cfraud and breaches of warranty&#8221; in inducing the Brazilian miner to enter the joint venture. The tribunal based its decision partly on the fact that the government <a rel=\"noreferrer noopener\" aria-label=\"revoked the concession in 2014  (opens in a new tab)\" href=\"https:\/\/www.mining.com\/guinea-government-to-strip-vale-bsgr-of-all-simandou-rights-97066\/\" >revoked the concession in 2014 <\/a>after finding that BSGR had obtained it by bribing officials.<\/p>\n<p>Strong iron ore prices and the resolution<br \/>\nof Steinmetz-related issues increased Guinea&#8217;s chances of finding companies<br \/>\ninterested in acquiring the rights for the vacant blocks, pushing it to launch<br \/>\na tender.<\/p>\n<p>But analysts, including Eric<br \/>\nHumphery-Smith from Verisk Maplecroft, have called the <a href=\"https:\/\/www.maplecroft.com\/insights\/analysis\/simandou-guinea-iron-ore-tender-likely-to-be-opaque\/\">transparency<br \/>\nof the process into question<\/a>.<\/p>\n<p>One of the main reasons, argues Eric<br \/>\nHumphery-Smith, an analyst at Verisk Maplecroft in London, is that prospective developers<br \/>\nmust pay $300,000 to access tender specification documents.<\/p>\n<p>\u201cSuch pay-to-play terms undermine<br \/>\nthe Minister\u2019s claims of transparency,\u201d Humphery-Smith says.<\/p>\n<p>The experts notes that while it\u2019s true that the current process is more transparent than the first-come, first-served method, bidders may still be exposed to reputation risks: <\/p>\n<blockquote class=\"wp-block-quote\">\n<p>\u201cThere are indications that the British law firm Phanar Legal Ltd, selected as the third-party transaction adviser for the tender, may have a conflict of interest. The firm\u2019s director Philip Rogers is a co-director of Guinea Bauxite Corporation Ltd (GBC), a mining company established in January 2019 by Alexander Zotov, a Russian businessman. Zotov holds an active production licence for a bauxite mine in coastal Guinea through his mining company Eurasian Resources (EAR).\u00a0<\/p>\n<\/blockquote>\n<blockquote class=\"wp-block-quote\">\n<p>\u201cEven if Rogers acts only as a secretary for these companies, his active interest in the Guinean mining sector leads one to question his law firm\u2019s impartiality in the Simandou tendering process. In other words, Phanar\u2019s management of the tender could lead the contracting authorities to look favourably on a prospective bid by one of Zotov\u2019s companies for another mine concession.\u201d<\/p>\n<\/blockquote>\n<p>Rio Tinto holds a 45% stake in blocks three and four of Simandou, which is <a href=\"https:\/\/www.mining.com\/rio-tinto-looks-at-developing-simandou-again-report\/\"  rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">actively planning\u00a0 to develop<\/a>. State-controlled Chinalco owns 40% and the Guinea government 15%.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Potential bidders now have until Aug. 19 to withdraw the necessary documents to prepare their offer.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[949,369,4],"tags":[43],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1130960"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1130960"}],"version-history":[{"count":6,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1130960\/revisions"}],"predecessor-version":[{"id":1131095,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1130960\/revisions\/1131095"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1130960"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1130960"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1130960"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}