Herbert Smith assisted Rio Tinto in the negotiation of a settlement agreement regarding the multi-billion dollar Simandou iron ore project in Guinea.

Herbert Smith Paris advised Rio Tinto Plc, Rio Tinto Iron Ore and Rio Tinto’s Guinean subsidiary, Simfer S.A., throughout the settlement discussions with the Government of Guinea.

Simandou is reported to be the largest private integrated iron ore mine and infrastructure project ever developed in Africa, as well as the world’s biggest known undeveloped iron ore deposit. The project includes the exploration, mining and processing of iron ore, together with the construction of related infrastructure facilities, including in particular a 700km railway and a deepwater mineral port (all within the Republic of Guinea). Production is forecast to reach approximately 95 million tonnes annually at capacity.

Simfer was granted a mining concession for the exploration and exploitation of iron ore in 2006, pursuant to a mining agreement signed with the Government of Guinea in November 2002 and ratified by law in February 2003. The mining concession was withdrawn in July 2008.

Herbert Smith has been assisting Rio Tinto for almost three years in its efforts to maintain the mining rights and guarantees it holds pursuant to its mining agreement.

Thanks to the new era of collaboration and a more favourable business environment which has opened up following the free and democratic election of Pr Alpha Condé as President of the Republic of Guinea, a settlement agreement was signed in Guinea on 22 April 2011 between Rio Tinto and the Republic of Guinea which settles all of the outstanding disputes between the parties.

The Herbert Smith team advising on this matter was led by Stéphane Brabant (head of the firm’s Africa practice, global head of mining and co-head of the crisis management group), working closely with senior associates Bruno Gay (energy and infrastructure, Paris) and Laurence Franc-Menget (arbitration, Paris).

Stéphane Brabant commented:

“This settlement was signed in a constructive and positive climate following the democratic election of President Professor Alpha Condé. The successful outcome of the negotiations was made possible thanks to efficient team work between Rio Tinto and Herbert Smith, and by the willingness of the State and Rio Tinto to conclude a win-win long-term agreement. Our assistance on this matter has provided us with an excellent opportunity to demonstrate the firm’s ability to work in challenging environments, as well as our strong African know-how, in-depth mining expertise and crisis management skills.”