Monday 29 October 2018 11:51 am

Rio Tinto says $1.3bn sale of stake in Guinea iron mine has lapsed

Reporter at City A.M. covering banking, markets and insurance

Reporter at City A.M. covering banking, markets and insurance

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A deal for Rio Tinto to sell its stake in a Guinea iron ore project for $1.3bn (£1bn) has fallen through.

The global miner had signed a non-binding agreement for China's Chinalco to buy its 45.05 per cent stake in the Simandou project in October 2016.

On Monday it said the agreement had lapsed and it would continue to work to realise the value of the project, which has been hit by long delays.

Rio Tinto owns 45.05 per cent of the project, while Chinalco has a 39.95 per cent stake and the government of Guinea owns 15 per cent.

Earlier this year Guinea's mining minister said he was confident an agreement would be reached but Rio's chief financial officer previously warned the deal was complex because of the three parties involved.

“Rio Tinto and Chinalco will continue to work with the Government of Guinea to explore other options to realise the value from the world-class Simandou iron ore deposit,” the company said in a statement on Monday.

Rio Tinto shares were up by more than three per cent in morning trading.