GUINEA’S mines minister has once again ordered a full suspension of activities related to the Simandou iron ore mine project after the two companies involved missed an extended deadline to agree on a joint venture.
Mines Minister Moussa Magassouba, a member of the ruling junta, said that both Rio Tinto’s subsidiary Simfer and Chinese-backed consortium Winning Consortium Simandou (WCS) have shown a ‘lack of willingness’ to work on a partnership, local news outlet Vision Guinee reports.
‘Caviar of iron ore’
At two billion tonnes in iron ore reserves and some of the highest grades in the industry (66 percent – 68 percent Fe, which attracts premium pricing), Simandou is one of the most easily exploitable iron ore deposits outside of Australia’s Pilbara region and Brazil.
At full production, the mine is expected to export up to 100 million tonnes per year. Simandou would by itself be the world’s fifth-largest producer behind Fortescue Metals and BHP.
Guinea has said any developer of the mine must build a railway spanning the country, even though it adds significant costs and the route to port through neighbouring Liberia is much shorter.
Eric Humphery-Smith, Senior Africa Analyst at risk intelligence company Verisk Maplecroft, wrote in March that Guinea’s decision to suspend all activities at Simandou reflected mostly the ‘power struggle’ between the companies and Guinean authorities regarding recommendations they made in December in relation to the rail and port infrastructure.
‘These developers are used to getting their way as the Guinean government has historically not offered much resistance (…) We don’t expect this to drag on much longer than a couple of months,’ he anticipated.
Simandou’s development is also crucial to China. The nation sees the project, described by Rio’s president of copper operations, Bold Baatar, as the ‘Rolls Royce of iron ore,’ as an opportunity to wean itself off its reliance on Australia’s iron ore.