Israeli businessman Benny Steinmetz has received a permit from the Guinea government to mine for iron ore in the West African nation. The permit relates to mining areas known as Block 1 and Block 2.
Parallel to this development, the mining giant, Rio Tinto, announced it would delay planned investment in the $6 billion Simandou iron ore project in Guinea. That's Rio Tinto's biggest project in Guinea - and the very same area where Steinmetz will be working.
Rio Tinto, which has almost $40 billion in net debt, is struggling against sharp falls in prices of its products as demand projections have been cut as a result of the global financial crisis.
Rio Tinto wns 95% of the Simandou project, which it has described as the world's biggest known iron ore reserve. Before Wednesday's announcement, production was due to begin in 2013 at 8 million tons, ramping up to 70 million tons by the year 2018.
Of course, Rio Tinto could be back: It hasn't ruled out a return to Guinea when the tide turns. Nor is it clear whether Steinmetz's permit is identical to the one Rio Tinto holds. No comment could be obtained from Steinmetz as of press time.
Steinmetz has been discussing the production of iron ore with the Guinean government since February 2006.
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