Rio Tinto Partners Secured Tax Rebate at Simandou Project

SEATTLE (Scrap Monster): According to regulatory filings, Rio Tinto and its partners have secured major tax concessions in Guinea’s Simandou iron ore project. The company and its partners will enjoy tax discounts of more than 50% on crucial parts of the development project.

The country’s ruling military junta has agreed for a corporate tax rate of 15% for the fist 17 years of operations at the railway and port that will carry iron ore from Simandou mountains to overseas customers. The tax rate stands well below the usual 35% rate and also less than half of the 30% paid by major firms.

The announcement of the new tax rates comes closely after the government hinting that Rio Tinto may have to build a local refinery at the mine, so as to ensure domestic processing facilities alongside.

In accordance with documents submitted by rival partners Winning and Baowu, the tax rate for the railway and port companies will remain at 15% for 17 years, but will rise to 25%, which still is below the country’s statutory tax rate of 35%.

An exploration license for Simandou was first secured by Rio Tinto in 1997. The development activities at the mine are in progress, with the company set to operate one of the project’s two mines.

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