Rio Tinto commits $6.2bn investment in Simandou iron ore project in Guinea
Rio Tinto, a leading global mining group, is making a groundbreaking move in the mining industry with its announcement at the Investor Seminar regarding the Simandou iron ore project in Guinea. The project, a partnership with CIOH (a Chinalco-led consortium), Winning Consortium Simandou (WCS), Baowu, and the Republic of Guinea, represents a significant investment in Africa’s mining sector. Rio Tinto is set to invest approximately $6.2 billion in the Simfer mine and co-developed rail and port infrastructure project.
Simandou iron ore project – Details and Economic Implications
Simandou, the world’s largest untapped high-grade iron ore deposit, holds an estimated Total Mineral Resource of 2.8 billion tonnes. Rio Tinto reports converting an estimated 1.5 billion tonnes to Ore Reserves, supporting a mine life of 26 years. The Simandou iron ore project is expected to strengthen Rio Tinto’s portfolio and contribute to the decarbonization of the steel industry. The development of over 600 kilometers of new multi-use rail and port facilities will significantly contribute to Guinea’s economic development.
Simandou iron ore project : Rio Tinto’s staggering $6.2bn bet on world’s largest untapped iron ore deposit
Mining Infrastructure Development in Guinea
The co-developed infrastructure for the Simandou iron ore project involves a substantial investment, with capacity and costs shared equally between Simfer and WCS. Simfer will construct a 70-kilometer rail spur and a transhipment vessel port, while WCS will build the main rail line and a barge wharf. Post-completion, the infrastructure and rolling stock will transfer to the Compagnie du Transguinéen (CTG) joint venture.
Future Prospects and Sustainability of Simandou Project
First production from the Simfer mine is expected in 2025, ramping up to an annual capacity of 60 million tonnes. The project’s internal rate of return (IRR) is anticipated in the low double digits. Rio Tinto’s share of capital investment remaining to be spent from 2024 is expected to be $5.7 billion, reflecting the company’s commitment to sustainable and responsible mining practices.
This investment in the Simandou iron ore project marks a major milestone for Rio Tinto and the mining industry, potentially reshaping the global iron ore supply and contributing to the economic advancement of Guinea.