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Guinea Approves Deal with China to Develop World’s Biggest Iron-Ore Project

Guinea Approves Deal with China to Develop World’s Biggest Iron-Ore Project

The National Transition Council of Guinea has given the green light for a partnership between Rio Tinto Plc, the Winning Consortium Simandou backed by China, and the Guinean government for the development of what would become the world’s largest iron ore reserve.

The council has ratified its support for the project, which involves the establishment of a mine, railway line, and port in Simandou by December 2025.

According to Mory Dounoh, a representative for the Council, the project will kick off ore production in 2026, to construct a steel mill and pellet plant in the 2030s.

Despite Simandou’s rich iron ore resources, progress has stalled due to ownership disputes, infrastructure hurdles, and political changes in Guinea.

Construction Timelines and Guidelines

Rio and Winning are subject to financial penalties if they fail to adhere to the construction timelines specified in the joint venture agreement, as stated by Dounoh.

“Guinea reserves the right to cancel without any compensation mining permits and infrastructure agreements relating to port and rail line works one year from the start of the application of penalties,” said Dounoh.

The Simandou mountain in the Republic of Guinea is home to arguably the world’s largest unexploited iron ore field, containing one of the purest deposits of this essential steel-making raw material.

In December 2023, the Rio Tinto Group announced a substantial investment of roughly $6.2 billion in a range of projects aimed at initiating the development of high-grade iron ores.

The Group’s total investment plan is estimated to be around $30 billion by 2025, aligning with analysts’ predictions for the start of exports from the Simandou mine.

This project is among Africa’s infrastructure endeavors, encompassing a vast 600km railway line and a deep-water port on the Atlantic coast near the Forécariah prefecture in Guinea.

The initial agreement signed by the partners last year sets December 2024 for the completion of construction of the mine and the infrastructure and the start of production in the first quarter of the following year.

Political Changes Effects on Simandou

The Simandou project in Guinea has some of the richest iron ore deposits anywhere in the world, but its development has been stymied for years by a litany of disputes over ownership and infrastructure, and by political changes in Guinea.

 Yet in the past year, a series of agreements have moved its development closer.