Rio Tinto debates Guinea payments at London board meeting

* Rio Tinto (LSE: RIO.L - news) declines comment

* Share (LSE: SHRE.L - news) price still rising

* CEO email says committed to ensuring does not happen again

By Barbara Lewis

LONDON, Nov 14 (Reuters) - Rio Tinto called a board meeting on Monday to discuss payments of $10.5 million made to a consultant on its project to develop the world's largest untapped iron ore reserves in Guinea, industry sources said.

Rio said last week it had alerted Australian, UK and U.S. authorities after becoming aware on Aug. 29 of emails from 2011 that referred to payments to a consultant providing advisory services on its Simandou project in Guinea.

Spokesmen for the mining company said on Monday they could not comment beyond last week's statement because a legal investigation was underway.

In an internal email sent at the weekend, Rio Tinto CEO Jean-Sebastien Jacques said he was aware many people in the company were "shell-shocked" by the news.

He said he had launched an investigation the day he found out there was an issue and that now it was in the hands of external authorities it could take "several years".

"We are committed to making sure we are not in the same situation again. As you know, over the last five years we have done a lot to strengthen our systems and controls," he said in the email, seen by Reuters.

Jacques took over as CEO at the start of July from Sam Walsh, who has a track record in iron ore. Jacques has earned kudos for his Oyu Tolgoi project in Mongolia which will be the world's biggest copper mine when completed.

The Simandou project has huge potential, but Jacques has voiced frustration over the difficulty of funding the massive infrastructure required to develop the mine.

At the end of October, Rio announced it was selling its Simandou stake to its partner Chinalco, which has declined comment on the investigation.

Rio's share rose on the news it had found a way out of Simandou and the rally has continued despite the uncertainty of a lengthy legal investigation. So far this year, Rio shares have gained nearly 60 percent.

The company announced the payments and suspended one senior executive on Nov. 9, the day of the U.S. presidential election won by Republican candidate Donald Trump.

Any negative impact on Rio's shares from the investigation was wiped out by a strong rally in mining stocks, driven by Trump's promises of major infrastructure projects which are likely to boost demand for raw materials.

Anti-corruption campaigners asked why the payments had not been questioned earlier.

"The issue is that the rules are tight and should have been picked up at the time," Peter Van Veen, business integrity director at Transparency International, said.

Frances Hudson, a director at Standard Life (LSE: SL.L - news) , which holds Rio shares, said the investigation could drag and it was not yet clear whether there would be any financial fallout.

"The risk of punitive action remains but price movements in the meantime will be determined by other factors," she said. (Additional reporting by Simon Jessop and Kirstin Ridley; editing by David Clarke)