Washington, April 12, 2006
— The board of directors of the International Finance Corporation, the private sector arm of the World Bank Group, has approved the acquisition of a 5 percent stake in Simfer S.A., a locally incorporated subsidiary for Rio Tinto’s Simandou iron ore project in Guinea. The final details of the transaction are currently being negotiated with Rio Tinto.
The company has recently been granted a mining concession by the Guinean government for the development of the project in the Simandou mountain range in eastern Guinea. Simfer is currently working on a pre-feasibility study for the Pic de Fon deposit within the concession area.
IFC’s involvement in the project will support Rio Tinto and the Guinean government in conducting the feasibility studies, environmental and social studies, and ore transportation studies for the development of the project. IFC is assisting Rio Tinto on issues relating to biodiversity, conservation and community development. IFC and Rio Tinto are also preparing a study of eastern Guinea’s economic potential and how to involve local small and medium size companies in the project’s supply chain.
“Rio Tinto’s Guinean iron ore project has the potential to contribute significantly to the country's economic development by creating jobs, improving infrastructure, increasing foreign exchange earnings and diversifying the mining sector,” said Rashad Kaldany, director of IFC’s Oil, Gas, Mining and Chemicals department. “We are partnering with Rio Tinto, an industry leader in environmental and social sustainable mining development, to enhance environmental conservation and social development in the project area.”
Mike Harris, managing director of Rio Tinto Iron Ore Atlantic, said IFC participation in the project would bring significant value. "The IFC has considerable expertise and experience in projects such as Simandou, particularly with regard to maximizing the development benefit to both the state and local communities. The contribution of expertise to the project would be an important element of IFC’s investment, and its involvement would be held in high regard by the Guinean government and other stakeholders inside and outside of Guinea."
The International Finance Corporation is the private sector arm of the World Bank Group and is headquartered in Washington, D.C. IFC coordinates its activities with the other institutions of the World Bank Group but is legally and financially independent. Its 178 member countries provide its share capital and collectively determine its policies.
The mission of IFC is to promote sustainable private sector investment in developing and transition countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications. For more information, visit
www.ifc.org
.
