Through its wholly owned Simfer subsidiary, Rio has extended NRW’s existing contract to December 31, 2011.

NRW has been working on the massive project since 2007 and has around 120 employees onsite.

Rio has spent more than $US650 million ($A650.2 million) on the project to date.

China’s Chinalco, through its wholly owned Chalco subsidiary, will acquire a 47% interest in the project by providing $US1.35 billion to sole fund ongoing development work over the next three years, at which time it will be left with a 44.65% interest and Rio Tinto 50.35%.

The remaining 5% would be owned by the World Bank’s International Finance Corporation.

The Guinean government holds an option to buy up to a 20% stake, and if it elects to do so, this would proportionally reduce the effective holdings held by Rio and Chinalco.

The partners expect to start mining by 2015, but believe there is scope to expand beyond the 95 million tonne per annum rate in subsequent years.

Rio signed a mining convention with the Guinean government in 2003 to develop a mining concession at Simandou.

However, the project has been problematic for Rio with a concession over the southern half of Simandou revoked in 2008 and then granted to BSG Resources, which was subsequently acquired by Vale.

Guinea has a new president, Alpha Conde, and the Australian Financial Review reported that Rio chief executive Tom Albanese attended his inauguration in the week leading up to Christmas.

The report said Mohamed Loamine Fofana had been named as Guinea’s new mining minister.

Fofana was a government adviser to former prime minister Jean-Marie Dore, who wrote to Rio last year, warning the miner that if it didn’t relinquish half of Simandou, it risked losing the entire project.

The AFR said the new president was yet to comment on the dispute.

Rio shares were A12c down this morning to $84.95.