All conditions for Rio Tinto’s investment in the Simandou high-grade iron ore deposit in Guinea have been fulfilled, with necessary Guinean and Chinese regulatory approvals now completed. The transaction is set to conclude during the week of July 15, 2024.
With recent Board approval from Simfer, the project will move forward, including funding for rail and port infrastructure in collaboration with Winning Consortium Simandou (WCS), Baowu, and the Republic of Guinea.
The development will include over 600 km of new multi-use railway and port facilities, facilitating the export of up to 120 million tonnes per annum (tpa) of iron ore from the Simandou mining concessions in southeastern Guinea. This represents Africa’s largest greenfield integrated mining and infrastructure investment.
Bold Baatar, Rio Tinto’s Executive Committee lead for Guinea and Chief Executive of Copper, expressed gratitude to the Government of Guinea, Chinalco, Baowu, and WCS for their partnership in achieving this milestone. Baatar highlighted the significance of the Simandou project for enhancing Rio Tinto’s portfolio and supporting the decarbonisation of the steel industry, alongside contributing to Guinea’s economic development.
As part of the transaction, Simfer will acquire a stake in the WCS project companies responsible for constructing the rail and port infrastructure, undertake part of the construction work, and fund its share of the infrastructure costs, totaling approximately $6.5 billion (with Rio Tinto’s share around $3.5 billion).
Chalco Iron Ore Holdings Ltd (CIOH) has completed its capital expenditure commitments, making payments totaling approximately $985 million for 2023 and 2024 expenditures.
Simfer and WCS will each handle separate infrastructure scopes: Simfer will build a 70 km spur rail line and a 60 million tpa transshipment vessel port, while WCS will construct a 536 km main rail line, a 16 km spur rail line, and a 60 million tpa barge port.
Upon completion, all infrastructure and rolling stock will be managed by the Compagnie du Transguinéen (CTG) joint venture, with Simfer and WCS each holding a 42.5% stake and the Guinean State holding 15%.
First production from the Simfer mine is anticipated in 2025, with a ramp-up period extending over 30 months to reach an annual capacity of 60 million tpa (27 million tonnes attributable to Rio Tinto). Initially, the mine will produce a single fines product before transitioning to dual fines products suitable for blast furnace and direct reduction processes.
