THE long-awaited $20bn iron ore, rail, and port project in Guinea, known as the Simandou project, is finally on the cusp of initiation after grappling with a tumultuous 27-year journey marred by legal and political impediments.
This ambitious project, expected to become the largest and highest-grade new iron ore mine globally, is poised to contribute nearly 5 percent to the global seaborne supply upon its commencement.
The genesis of this monumental project traces back to 1997, when Rio Tinto secured a licence to explore the iron ore reserves in the Simandou mountain range. Since then, Guinea has witnessed two coups d’état, experienced the tenures of four heads of state, and conducted three presidential elections, prolonging the project’s realisation.
The anticipated launch in 2024 hinges on Rio Tinto’s state-owned Chinese partners securing the final approval from Beijing, marking the commencement of what Rio Tinto’s Bold Baatar describes as the most intricate project in the company’s history. ‘There is nothing else out there of this scale and size,’ Baatar emphasised to the Financial Times.
This groundbreaking project involves a collaborative effort between Rio Tinto, the Guinean government, and at least seven other companies. Rio Tinto is set to spearhead the Simfer iron ore mine, partnering with a consortium led by Chinalco, the world’s largest aluminum producer.
Furthermore, the WCS iron ore project will be helmed by Baowu, the world’s largest steel producer, in collaboration with a consortium led by Singapore-based Winning International Group. Jointly, they will finance the construction of a 552km railway and a deepwater port along Guinea’s Atlantic coast, accompanied by a 70km rail spur connecting the mine to the main line. Rio Tinto Group is expected to invest about $6.2bn in this monumental infrastructure development.
Beyond revolutionising iron ore supply, this project aligns with the industry’s efforts to reduce emissions. Rio Tinto explores alternative approaches like direct reduced iron technology, emphasising the importance of high-grade iron ore, notably found in Simandou, with an average iron content exceeding 65 percent, termed by Baatar as the ‘caviar of iron ore.’
Baatar underscores Simandou’s potential in aiding the decarbonisation of China’s steel industry, a pivotal step considering China’s production of over 1 billion tonnes of steel in 2022, representing more than half of the global production—a move critical for global decarbonisation in steelmaking.
