Guinea delays deadline in Simandou iron ore deposit tender

By Saliou Samb

CONAKRY, Aug 6 (Reuters) - Guinea has pushed back its deadline to withdraw tender documents for blocks 1 and 2 of Simandou in an effort to boost competition for the world's largest undeveloped iron ore deposit, a senior mining official told Reuters on Tuesday.

It launched the international tender in mid-July, giving companies until Aug. 2 to outline their bids, after strong iron ore prices and the resolution of some legal problems raised hopes for the site's development.

"Given the complexity of the case, we have decide to allow more time for companies to prepare. This will allow increased competition between them," said the mine ministry's secretary-General, Sadou Nimaga.

The tender documents will be available for an additional two weeks until Aug. 19, he said. "Several companies have already taken the file. Very big groups are interested."

The deadline for submission of bids has been adjusted accordingly, a source familiar with the matter said.

Simandou contains high grade iron ore, which commands a premium and has become sought after by countries, including China, because processing it creates less pollution than lower grade ore.

Blocks 1 and 2 have become available following the resolution of one of the legal cases that have embroiled Simandou. Billionaire Beny Steinmetz's BSG Resources (BSGR) said it would walk away from the Simandou project, but retain the right to mine the smaller Zogota deposit.

The Guinean government has said ore mined from Simandou must be shipped from its own ports, presenting a challenge for prospective developers as its location is 650 km (404 miles) from Guinea's coast.

Anglo-Australian miner Rio Tinto holds a 45.05% stake in Simandou's remaining blocks 3 and 4 which it has been trying to sell.

(Writing by Alessandra Prentice, editing by Louise Heavens)