Rio Tinto suspends energy and minerals chief over Simandou payments

PERTH (miningweekly.com) – Mining major Rio Tinto has immediately suspended its energy and minerals chief Alan Davies, and has contacted authorities in the US and UK, after uncovering a $10.5-million payment to a consultant in Guinea.

The miner said on Wednesday that it had become aware of email correspondence from 2011 relating to the contractual payment to a consultant providing advisory services on the Simandou iron-ore project.

While not revealing what the correspondence contained, Rio said that it had launched an investigation into the matter, led by external council.

Based on the investigation to date, the company had notified the relevant authorities and was in the process of also contacting Australian authorities.

Rio said that it would cooperate fully with any subsequent inquiries from all the relevant authorities.

The miner in October signed a nonbinding agreement to sell its stake in the Simandou project to Chinese company Chinalco for between $1.1-billion and $1.3-billion, based on the timing of the project development.

Rio in July this year shelved the development of the $20-billion project, which includes a 650 km railway and a deepwater port, citing a global iron-ore oversupply and challenges in securing financing.

Meanwhile, the company’s legal and regulatory affairs group executive, Debra Valentine, also stepped down. Valentine previously notified the company of her intention to retire in May next year.