The Simandou mountain in the Republic of Guinea contains arguably the world’s largest untapped Iron Orefield with one of the purest deposits of the steel-making raw material.
Plans to develop the mine began as far back as 1997 when Rio Tinto secured a license to explore the mountain’s Iron ore.
However, political uncertainties and other legal battles stalled the execution of the project since then.
During the period, Guinea witnessed two coups d’état, four heads of state and three presidential elections.
Backstory
- Simandou’s mining concession is segmented into four blocks, with Rio Tinto owning rights extending to blocks 3 and 4 through the collaborative entity Rio Tinto Simfer.
- This joint venture involves Rio Tinto, Chalco Iron Ore Holdings (CIOH), and the Government of the Republic of Guinea, where Rio Tinto assumes the role of majority shareholder and managing partner in Rio Tinto Simfer.
In addition, Rio Tinto is also engaged in cooperation with the Government of Guinea and Winning Consortium Simandou (WCS), the developers of blocks 1 and 2 within the Simandou mining concession.
Together, they aim to jointly develop the essential infrastructure required for transporting mined iron ore from the far southeast of the country to Guinea’s maritime borders and beyond.
- In December 2023, Rio Tinto Group announced it would cough out around $6.2 billion on a series of projects aimed at kick-starting the development of high-quality iron ores.
- In total, the Group plans to spend around $30 billion by 2025 when analysts project the Simandou mine will begin exports.
- The project around the mine is one of the biggest infrastructure projects in Africa- it includes; an almost 600km rail line and a deepwater port on its Atlantic coast, around the Forécariah prefecture in Guinea.
In an interview with Bloomberg in December, Rio’s Group CEO, Jakob Stausholm said, the Iron ore in Simandou was the core of the future but noted the challenges in developing such a mine such as infrastructure problems.
He said,
- “It is, of course, expensive to build a new iron ore mine, because you also have to build the infrastructure, but it is iron ore of exceptional quality, probably the highest quality on the planet. It’s the ore for the future.”
When fully developed, the Simandou mine will add around 5% to 7% to the global sea-borne iron ore of Rio Tinto
- Already excavation works have commenced along the rail corridor, and Rio Tinto intends to initiate mine construction once Beijing grants approval for Chinalco’s investment.
- Anticipated shipping of the first one is scheduled for 2025, with production projected to reach 60 million tonnes annually by 2028.
