Rio Tinto energy and minerals chief suspended over Simandou bribery claims

Rio Tinto (ASX, LON:RIO), the world’s second largest mining company, has suspended Alan Davies, head of its energy and mineral division, after discovering payments made to a consultant working on its Simandou iron ore project in Guinea.

Together with alerting US and UK authorities, the miner said it had only recently become aware of emails from 2011 about contractual payments totalling $10.5m made to a consultant for advisory services on its former project.

“The company launched an investigation into the matter led by external counsel. Based on the investigation to date, Rio Tinto has today notified the relevant authorities in the UK and US and is in the process of contacting the Australian authorities,” it said in a statement.

Rio’s legal and regulatory affairs executive, Debra Valentine, who was due to retire next May, has also stepped down, the company said.

"Rio Tinto intends to co-operate fully with any subsequent inquiries from all of the relevant authorities. Further comment at this time is therefore not appropriate," the company said in a statement to the Australian stock exchange.

Alan Davies was in charge of Simandou in 2011.

Simandou's chequered history

In May 2014, the Guinea government and Rio Tinto (LON:RIO) and its partners – China's Chalco together with the World Bank – inked a landmark $20 billion deal for the southern section of the Simandou iron deposit in Guinea.

The agreement called for a new 650km railway across the West African country to Conakry, Guinea's capital in the north, plus a new deep water port at a conservatively estimated cost of $7 billion; infrastructure investments that would double the economy of the impoverished country.

Two years later Rio, the world's number two producer of iron ore, delivered a bankable feasibility study on the project. Then, in July this year, the Anglo-Australian giant pulled the plug, saying that "in the current environment" it did "not see a way forward."

More to come…

Canga camp. (Image courtesy of Rio Tinto Simandou)

The post Rio Tinto energy and minerals chief suspended over Simandou bribery claims appeared first on MINING.com.

from MINING.com http://www.mining.com/rio-tinto-energy-and-minerals-chief-suspended-over-simandou-bribery-claims/