LONDON (BLOOMBERG) - Rio Tinto Group faces a probe by the UK's Serious Fraud Office over its business dealings in Guinea, just months after Australia's federal police started an investigation into payments relating to the US$20 billion (S$27.2 billion) Simandou iron ore project in the African nation.

The prosecutor said in a statement on Monday (July 25) it was investigating the conduct of the miner, its employees and third parties.

The SFO announcement comes after Rio alerted authorities, including the SFO and the US Justice Department, in November to a US$10.5 million payment to an external consultant in 2011 for assisting with negotiations with Guinea's President Alpha Conde. The company later terminated contracts of two senior executives, saying they had failed to maintain standards of the company's code of conduct.

"Rio Tinto will fully cooperate with the Serious Fraud Office and any other relevant authorities, as it has done since it self-reported in November 2016," a spokesman said in an e-mailed statement.

Shares in the miner fell as much as 2.3 per cent in US trading after the news, and then pared most of the loss to close 0.5 per cent lower. In Sydney, Rio declined 0.2 per cent by 11.14am on Tuesday, as an index of Australian materials producers rose 0.4 per cent.

Rio exited the Simandou project in October, selling its stake to partner Aluminum Corp. of China, referred to as Chinalco, after failing to attract the funding needed to develop it.

The investigation, which could stretch on for years, comes as Rio looks to appoint a new chairman after Mr Jan Du Plessis stepped down in April. The company is planning to appoint his replacement by the end of the year.