Rio Tinto Ltd (ASX: RIO) shares have been having a tough time in recent sessions.
For example, since this time last week, the mining giant's shares have lost almost 6% of their value.
That's despite some good news in recent days which management has described as an "important milestone."
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What's the news?
Last week, Rio Tinto and the Simfer joint venture revealed that they have reached an important milestone by concluding key agreements with the Republic of Guinea and Winning Consortium Simandou (WCS).
This relates to the trans-Guinean infrastructure for the world-class Simandou iron ore project.
The release explains that the Co-Development Convention with the Republic of Guinea and associated agreements adjusting Simfer and WCS's existing mine conventions create the legal framework for the co-development of more than 600 kilometres of new multi-use rail together with port facilities. This will be used to export iron ore from the Simandou mining concessions in the southeast of the country.
'Unlock this world class resource'
Rio Tinto's executive committee lead for Guinea and copper chief executive, Bold Baatar, said:
With these agreements we have reached an important milestone towards full sanction of the Simandou project, bringing together the complementary strengths and expertise of Rio Tinto and our partners, the Government of Guinea and Winning Consortium Simandou, for the infrastructure that will unlock this world class resource. Simandou, the world's largest known undeveloped supply of high-grade, low-impurity iron ore, will strengthen Rio Tinto's portfolio by complementing our existing Pilbara and Iron Ore Company of Canada products.
The Co-Development Convention requires ratification by the Guinean State. It is also subject to a number of conditions, including the State's approval of the final feasibility study for the project.
Are Rio Tinto shares good value?
One broker that was pleased with the news is Morgan Stanley.
In response, the broker has retained its overweight rating and $122.50 price target on Rio Tinto's shares.
This implies a potential upside of 18% for investors over the next 12 months.
