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Australia's Fortescue confirms bid to develop Guinea iron ore

Kitco News

MELBOURNE, Oct 7 (Reuters) - Australia's Fortescue Metals Group confirmed on Monday that it has submitted a bid to develop two blocks in the giant Simandou iron ore deposit in Guinea.

Reuters reported on Friday that Fortescue and Guinea's biggest bauxite exporter SMB-Winning were the last two bidders in the running for the rights to develop the two blocks.

A Guinea government commission in charge of the international tender for Simandou blocks 1 and 2 should come to a final decision in around a month, the sources close to the commission said last week.

"Consistent with our active business development program, Fortescue is interested in global opportunities in iron ore and other commodities which align with our strategy and expertise," Fortescue Chief Executive Elizabeth Gaines said in an emailed statement to Reuters.

"Following the release of information at a public meeting held in Guinea last week, Fortescue confirms that it is participating in the tender for Simandou Blocks 1 and 2.

Details of Fortescue's bid are confidential and there is no guarantee that any bid submitted will be successful."

Speculation emerged in July that Fortescue may be interested in the deposit after chairman Andrew Forrest was pictured on social media among a group of potential investors in a Liberian rail line.

Guinea has struggled for decades to develop the Simandou deposit which is among the world's biggest and contains billions of tonnes of high-grade iron ore, increasingly in demand as steel mills try to lower carbon emssions.

Simandou has been mired in protracted legal disputes, while the high cost of infrastructure to transport the ore out of the remote southeastern corner of Guinea has also put a dampener on potential developers' enthusiasm.

The government insists that ore from Simandou must be exported through Guinea, requiring the developer to build a 650 km (400 mile) railway to Guinea's coast as well as a deep-water port, taking the overall cost of developing the deposit to an estimated $23 billion.

Simandou blocks 3 and 4 are owned by a joint venture of Rio Tinto , China Aluminium Corp (Chinalco), and the Guinean government.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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