LONDON – Rio Tinto indicated it would not take part in a tender for the mining rights for the northern half of the disputed Guinea iron-ore deposit Simandou, saying the government would prefer other companies to invest.

The global miner already owns a stake in the southern part of the project, the biggest and highest quality untapped iron-ore deposit known.

Mining concessions for the northern half are now up for grabs after the government took them from the previous holders: Brazilian miner Vale and BSG Resources (BSGR), the mining branch of Israeli-billionaire Beny Steinmetz's group.

Potential investors may be deterred, however, by falling iron-ore prices and by a threat from BSGR that it will sue any investor in its former license.

iron-ore has lost half of its value since hitting a peak of almost $200/t in 2011.

"I don't think that the government actually wants us to participate," Rio Tinto Chief Executive Sam Walsh said during a press briefing.

"I think the government is looking to have a bit of diversity in terms of who would build that project. And that's fine, we understand that."

Rio Tinto said exports are likely to start from the southern part of Simandou by December 2018.

Risks of a delay in the $20-billion project are high, however, given that Rio Tinto and the Guinea government still have to find partners to build and finance infrastructure to move the ore out of its location, a remote mountain in the north-east of Guinea.

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Rio signed an investment framework with Guinea in May setting out conditions for the massive infrastructure investment needed for Simandou. But it said it would take a decision on whether to go ahead only after it receives a in-depth feasibility study due next year.

"The (start) date will be determined by the bankable feasibility study," Walsh said.

"Some people have thought, when we announced the signing of the framework, that we were committing to the project. It's a commitment to the framework. That (commitment to the project) will need to be studied during the bankable feasibility study. And it's at that point when it's completed that we would make an investment decision."

When fully ramped up, southern Simandou could produce about 100-million tonnes a year, or just below 10% of the global seaborne iron-ore market.

Rio also held the rights to develop the northern part of Simandou until 2008, when former President Lansana Conte's government revoked that permit and transferred it to BSGR, arguing that Rio had moved too slowly.

In April, Rio filed a lawsuit against BSGR and Vale, its former partner in the project, alleging they had devised a fraudulent scheme to steal those rights.

Other parties interested in the northern Simandou licenses are steelmaker ArcelorMittal, Vale, BHP Billiton and the Chinese government, by far the largest consumer of the steel raw material, sources said.

Miner and commodity trader Glencore has also been courting Guinea over its iron-ore riches, a document obtained by Reuters shows.