Rimes leaves IOH as Rio deal ends

Iron Ore Holdings much vaunted alliance with Rio Tinto, trumpeted as an example of big miners supporting junior iron ore companies in the Pilbara, has come to nought, with the two companies terminating a sales agreement.

IOH said today it would continue discussions with Rio despite its ore sales agreement being terminated.

In December last year, IOH announced that it had entered two break-through agreements with Rio: an iron ore sales agreement for production from the Phil's Creek project and a relationship agreement relating to IOH's Iron Valley deposit.

IOH said today it was unable to reach agreement in relation to delivery of Phil's Creek ore to Rio's Yandicoogina site by the deadline of 8 August.

"However, the Company will seek to continue discussions with Rio Tinto, with the objective of reaching a new agreement to terms on which the Phil's Creek mine can proceed," the company said in a statement.

The board of IOH announced Mr Rimes resignation late on Friday.

"Matt has made an outstanding contribution to the growth and development of the Company and the Board wishes him well in all his future endeavours," the company said .

IOH has started the search for a new chief executive or managing director.

In the interim Mal Randall will act as executive chairman, with support from non-executive directors Richard Court and Brian O'Donnell.

Last week IOH also announced its agreement with Rio Tinto subsidiary Hamersley Iron over the Iron Valley project had expired.

The exclusivity agreement with Hamersley expired on 31 July 2010.

In a statement IOH said both companies have considered a number of possible development options for Iron Valley including joint venture structures but no agreement had been reached to date.

IOH said that discussions were continuing but the company was now in a position to discuss the project with other interested parties.

IOH shares were down 6 cents or 3.64 per cent to $1.59 following the announcement.