- Rio Tinto (NYSE:RIO) is exiting its $US20B Simandou iron ore project in Guinea, CEO Jean-Sebastien Jacques tells The Times, saying that the cost of developing the mine could not be justified in an iron ore market that is suffering from huge overcapacity.
- Simandou contains more than 2B metric tons of iron ore, and the proposed development - which included an iron ore mine in central Guinea, a 650 km railway and a deepwater port - had the potential to double the size of the country's economy.
- The news sent iron ore prices 3.5% higher, past $55.90/metric ton to its highest level since May 18.
- Making the interview rounds over the weekend, the new CEO says he will not undertake a more aggressive approach to M&A, perhaps surprising analysts who predicted his appointment would signal more deals as the commodities rout forces distressed rivals to sell assets; he says he will not spin off a newly formed division that includes coal and uranium assets.
- RIO -2% premarket.