1 minute read
25 Jul 2017
7:30 am

UK Serious Fraud Office probes Rio Tinto Guinea project


Britain's Serious Fraud Office has opened an investigation into mining giant Rio Tinto for "suspected corruption" surrounding the development of the world's biggest untapped iron-ore deposit in Guinea.

Plans to mine the massive Simandou iron ore deposits — a US$20-billion project deep in the remote interior of the poor west African country — have been mired in legal disputes and political upheaval for years.

Rio Tinto reported itself to regulators last November after conducting an internal probe into US$10.5 million in payments made over the project.

In a statement late Monday, Britain’s fraud investigators said: “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 told AFP Tuesday 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 Australian Federal Police confirmed it was also investigating the Guinea allegations and that Rio was co-operating.

Rio Tinto first secured exploration rights to Simandou in 1997.

In 2014, it sealed 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.

Rio launched its internal investigation after becoming aware last August of email correspondence from 2011 relating to the payments “made to a consultant providing advisory services” for the project.

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

A month later, it notified US, British and Australian regulators of its internal investigation. The Anglo-Australian firm is listed on both London and Sydney’s stock exchanges.

The world’s second-largest miner also fired two executives — energy and minerals head Alan Davies and legal affairs chief Debra Valentine — following its probe.

The miner’s shares fell 0.24 percent to Aus$62.47 in mid-day trading Tuesday in Sydney.