World Bank arm monitoring Rio Tinto’s payments probe in Guinea

SYDNEY – The World Bank’s private investment arm said it’s monitoring the situation after Rio Tinto Group announced a probe into a $10.5-million payment connected to the Simandou iron-ore project in Guinea, West Africa.

The International Finance Corp. is supporting efforts to identify funding for the project, including through plans for Rio Tinto to  hand over its stake to Aluminum Corp. of China, according to Frederick Jones, an IFC spokesperson. The World Bank arm became aware on Nov. 8 that Rio Tinto had notified the relevant authorities following an internal investigation into e-mail correspondence from 2011 relating to contractual payments made to a consultant providing advisory services on Simandou.

“We are closely monitoring the situation and will work with Rio Tinto, the government of Guinea and community stakeholders to ensure our investments meet high standards for transparency, revenue management, governance and environmental and social risk management,” Jones said in an e-mail. “IFC has been a shareholder in Simandou since 2006, and we continue to see significant long-term potential for the project.”

The world’s second-biggest mining company is investigating a $10.5-million payment it made in connection with the Simandou project to a French banking consultant who was a university friend of President Alpha Conde of Guinea. On Thursday, it said it had fired two of its top executives in connection with the matter.

Guinea’s former mining minister said November 9 that the head of Rio Tinto’s operation in the country had offered him a bribe in early 2010 in order to win back control of half of the undeveloped Simandou project, considered the world’s biggest untapped iron-ore deposit.

The IFC will continue to invest in Guinea, including in the bauxite mining sector where on September 2 it announced a $200-million investment with Cie des Bauxites de Guinee.

“The IFC will also continue to support advisory programs that encourage the development of local businesses that supply goods and services to Simandou and other parts of the mining sector,” Jones said.