(Bloomberg) -- Rio Tinto Group, the world's second-biggest miner, said a pact to offload its stake in the $20 billion Simandou iron ore project in Guinea to its Chinese partner, Aluminum Corp. of China, has lapsed.
The parties had struck a non-binding agreement two years ago, when Rio said it could receive payments of between $1.1 billion and $1.3 billion for the stake, dependent on the project being developed. Rio and its partner, known as Chinalco, will work with Guinea's government “to explore other options to realize value” from the asset, Rio said Monday in a statement.
Development of Simandou, which holds an estimated 2 billion metric tons of iron ore, has been hampered by issues including infrastructure requirements. Rio said in 2017 it had decided the project's estimated $20 billion development costs were too high.
London-based Rio is assisting authorities in three countries over investigations into a $10.5 million payment to an external consultant made in 2011 in connection with the project. The company in 2016 alerted authorities including the U.S. Department of Justice and the U.K.'s Serious Fraud Office to the payment.
Read more: Rio Defers Former CEO's Pay as Guinea Payments Investigated
Rio holds about 45 percent of the project, while Chinalco has about 40 percent and Guinea's government owns a 15 percent stake, the company said.
To contact the reporter on this story: David Stringer in Melbourne at dstringer3@bloomberg.net
To contact the editors responsible for this story: Phoebe Sedgman at psedgman2@bloomberg.net, Keith Gosman, Jake Lloyd-Smith
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