Rio Tinto strikes rail deal for huge iron ore mine in Guinea

 The development of the world’s biggest untapped iron ore deposit came another step closer after Rio Tinto Plc and its consortium partners agreed a pact with the Guinea government over building a crucial rail line.

The Simandou project in Guinea has some of the richest iron ore deposits anywhere in the world, but its development has been stymied for years by a litany of disputes over ownership and infrastructure, and by political changes in Guinea. Yet in the past year, a series of agreements have moved its development closer.

Rio said Friday that it had struck a deal with Guinea and the Winning Consortium Simandou — which is building another project at Simandou — to develop the 600 kilometers (373 miles) of rail lines need to transport the iron ore to the port.

Simandou is divided into four blocks, with blocks 1 and 2 controlled by the Winning Consortium Simandou, backed by Chinese and Singaporean companies, while Rio and Aluminum Corp. of China, known as Chinalco, own blocks 3 and 4.

The two parties have been in discussions about the shared access to the railway, as well as other areas such as the environmental impact. Rio said Friday that rail and port capacity and the costs of building them will be shared equally between the two consortia.

Rio said last year that its share of the project would be roughly $4 billion. It offers the world’s No. 2 miner a potentially huge new source of supply as the company looks to grow its most profitable business.

“With these agreements we have reached an important milestone towards full sanction of the Simandou project,” Bold Baatar, Rio’s executive in charge of the project, said Friday.