JOHANNESBURG (miningweekly.com) – Diversified miner Rio Tinto is "underinvested" in Africa, says its CEO Tom Albanese, who anticipates the continent becoming the site of the British-Australian multinational's newest iron-ore growth vector.

Albanese tells Mining Weekly Online that he would like to see the first iron-ore production from a proposed large new 70-million-ton-a-year West African opportunity in the next three to five years.

He says that Rio Tinto has more than 1 000 personnel in Guinea for the proposed high-grade Simandou iron-ore project, which will require one of the largest civil transport developments in Africa.

Simandou is expected, from the outset, to have close to a third of the iron-ore capacity of the company's well-established Pilbara iron-ore field in Australia, which yields 220-million tons of product a year.

"We're talking about a starting production base in the 70-million tons range," Albanese tells Mining Weekly Online, which conducted the whistle-stop video interview at Johannesburg airport.

"The iron-ore quality is exceptionally good. We are looking at material with a 65%-plus iron content with a very low level of impurity.

"It's very similar to some of the highest-grade material that has been mined historically in Brazil. If you put the maps of Africa and South America together, like the tectonic jigsaw puzzle, you'll see that a lot of the iron-ore fields in Brazil match up with the potential iron-ore fields of West Africa," he adds.

Rio Tinto has signed a memorandum of understanding with Chinalco on the Simandou project, which already has the International Finance Corporation as a partner.

Besides its contribution to capital, Chinalco, potentially with other Chinese State-owned enterprises, has strong infrastructure development capability.

Rio Tinto will be the operator and its health, safety, environment and community engagement principles will be applied.

Engineering and feasibility studies under way will determine Simandou's capital cost.

More than 700 km of rail will be needed as well 20 km of tunnel through mountain ranges.

The shallow port will require many kilometres of causeway and considerable dredging.

Although Rio Tinto's investment in Africa spans half a century, only 4% of its business is currently on the continent, including at Richards Bay Minerals and Palabora Mining in South Africa, and at Rossing in Namibia.

Its largest investments in the past ten years have been in Australia - where it has invested $38-billion - the US and Canada.

To date, Rio Tinto has invested $600-million at Simandou in Guinea, where the recent democratic election is seen as mitigating investment risk.

"Over the course of the past few months, we have been asking ourselves, as a management team, whether we are sufficiently invested in Africa, and I do believe that we are under invested, in the context of the size, the breadth and the scale of a company like Rio Tinto," Albanese says.

The scope of Rio Tinto's proposed joint venture with Chinalco covers rail and port infrastructure as well as the mine itself.

Chinalco will acquire a 47 % interest in the new joint venture by providing $1,35-billion on an earn-in basis through the sole funding of ongoing development work.

Rio Tinto will have an ultimate effective interest of 50,35% and Chinalco 44,65%.

The Guinean government holds an option to buy up to 20% of the project.