Simandou iron ore export project : progress on rail and port capacity

This involves the construction of a 600- kilometre rail system running from Simandou via Forécariah, Kassa and Nialinko to a new export terminal located in the port of Morebaya in southeastern Guinea.

As a result, the proposed development of the world’s biggest untapped iron ore mine moved a step forward. The Simandou project in Guinea is understood to contain some of the richest iron ore deposits anywhere in the world, but the development has struggled to gain traction for several years due to various disputes over ownership and infrastructure, plus frequent political changes in Guinea.

However, there have been a series of agreements signed between the partners and the government, which appear to be giving the project a fighting chance of success.

The infrastructure capacity, including the 600km of rail lines necessary to transport the mined iron ore to Morebaya for export and the new port facilities, and the associated costs will be shared equally between Simfer, which is developing blocks 3 and 4 of the Simandou project, and WCS, which is developing blocks 1 and 2. China Baowu Steel Group has also previously entered into a term sheet agreement with WCS that may see it partner in the WCS scope for blocks 1 and 2 of the Simandou mining concession and the infrastructure joint venture.

To put the size of the project into perspective, Rio Tinto maintains that its share of the cost of the overall development will be approximately US$4bn. It offers, what is already the world’s second largest mining company, a huge new source of iron ore cargo supply.

Bold Baatar, Executive Committee lead for Guinea and Copper Chief Executive, Rio Tinto, notes: “With these agreements we have reached an important milestone towards full sanction of the Simandou project, bringing together the complementary strengths and expertise of Rio Tinto and our partners, the Government of Guinea and Winning Consortium Simandou, for the infrastructure that will unlock this world class resource. Simandou, the world’s largest known undeveloped supply of high-grade, low-impurity iron ore, will strengthen Rio Tinto’s portfolio by complementing our existing Pilbara and Iron Ore Company of Canada products.”