RIO Tinto’s CEO, Jakob Stausholm, disclosed to the Financial Times on Wednesday that the company’s board has given the green light to the ambitious Simandou mining project situated in Guinea. The announcement marks a significant milestone for the $20bn development, aiming to kickstart iron ore production as early as 2025.
‘The board yesterday approved the largest mining project in the world,’ Stausholm stated in his interview with the Financial Times, underlining the scale and significance of the venture.
The Simandou iron ore project, slated to become the world’s largest and highest-grade new iron ore mine, has long been anticipated. Rio Tinto, in collaboration with the Guinean government and at least seven other entities, including five from China, has persistently pursued the project despite nearly three decades of setbacks and scandals.
Following extensive negotiations and overcoming various hurdles such as legal disputes, political transitions in Guinea, and construction challenges, Rio Tinto is poised to invest $6.2bn in the mine, rail, and port infrastructure in Guinea.
While the final investment approval from Rio’s Chinese state-owned partners, including Chinalco and Baowu, remains pending, Stausholm expressed optimism that the endorsement would be secured imminently.
Earlier in January, Baowu took a significant step by raising $1.4bn from a bond issue in China dedicated to supporting the Simandou project. The initiative entails the construction of a 552-kilometre rail line facilitating the transportation of high-grade iron ore from two new mines in the Simandou mountains to a new deepwater port on Guinea’s Atlantic coast.
Rio Tinto’s involvement in the Simandou project is through its Simfer joint venture with China’s Chalco Iron Ore Holdings (CIOH) and the government of Guinea. Rio Tinto holds a majority stake of 53 percent, with CIOH holding the remainder.
With the board’s approval secured and key investments in place, Rio Tinto looks poised to propel the Simandou mining project forward, potentially reshaping the landscape of global iron ore production in the years to come.