Simandou Ore Project: From Stop To Start Again!

When Guinea’s ruling junta assumed power last year all work on the project was halted with the new ruling body requiring a larger stake in the business.

Now the partners in the project have agreed a new equity split – 42.5 per cent Rio Tinto’s Guinea subsidiary, Winning Consortium Simandou (WCS) 42.5 per cent and the government 15 per cent – and the partners have formed a railway and port joint venture on the same equity basis. A 600km rail line will be built to transport ore from the mine sites to a port in the Forecariah district, about 80km south of the capital Conarky. New port infrastructure and equipment will be required to load cargo into Cape Size vessels.

Simandou is split up into four blocks – blocks 1 and 2 are controlled by Winning Consortium Simandou, an entity supported by Chinese and Singaporean companies and blocks 3 and 4 owned by Rio Tinto and Aluminium Corp. of China.

Simandou represents a huge new source of iron ore supply for the partners in the project and for China a major route via which to reduce dependency on Australian iron ore.

The construction of the rail line was a major point of negotiation in the latest talks between the partners with the ruling junta understood to be looking for equity without cost.