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Rio Tinto ready to ride the Simandou train

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The Simandou iron ore project in Guinea has a long and chequered history. Image credit: Rio Tinto

Rio Tinto ready to ride the Simandou train  

Development of the massive Simandou iron ore project in Guinea is gaining momentum and first iron ore is expected to be delivered in 2025, said Rio Tinto in an update at its investor seminar yesterday.

Simandou, believed to be the world’s largest untapped high-grade iron ore deposit, has a chequered history, but after many years the project is now on track to start producing iron ore as soon as 2025.

Global mining giant Rio Tinto is developing Simandou in partnership with CIOH, a Chinalco-led consortium, Winning Consortium Simandou (WCS), Baowu and the Republic of Guinea under the Simfer joint venture.

The Simfer joint venture’s mine concession holds an estimated total mineral resource of 2.8 billion tonnes. According to Rio Tinto an estimated 1.5 billion tonnes will be converted to ore reserves that will support a mine life of 26 years, with an average grade of 65.3% iron and low impurities.

Rio Tinto further reports mineral resources exclusive of ore reserves of 1.4 billion tonnes at 66.1% Fe and low impurities.

Simandou will strengthen Rio Tinto’s portfolio (Rio Tinto ready to ride the Simandou train)

Rio Tinto estimates that the development of the Simfer mine and the co-development of rail and port infrastructure will cost in the region of about USD6.2-billion.

According to Rio Tinto Executive Committee lead for Guinea and Copper Chief Executive Bold Baatar said Simandou will deliver a significant new source of high-grade iron ore that will strengthen Rio Tinto’s portfolio for the decarbonisation of the steel industry.

“The trans-Guinean rail and port infrastructure will make a significant contribution to Guinea’s economic development,” says Baatar.

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Largest greenfield investment in Africa (Rio Tinto ready to ride the Simandou train)

In what will be the largest greenfield integrated mine and infrastructure investment in Africa, more than 600km of new multi-use rail together with port facilities will be co-developed by the Republic of Guinea, Simfer and WCS.

This will allow the export of up to 120 million tonnes per year of mined iron ore by Simfer and WCS from their respective Simandou mining concessions in the southeast of the country.

The co-developed infrastructure capacity and associated cost will be shared equally between Simfer, which will develop, own, and operate a 60 million tonne per year mine in blocks 3 and 4 of the Simandou Project, and WCS, which is developing blocks 1 and 2.

Under the co-development arrangement, Simfer and WCS will deliver separate infrastructure scopes to leverage expertise. Simfer will construct the approximately 70km Simfer spur rail line and a 60 million tonne per year transhipment vessel (TSV) port, while WCS will construct the dual track approximately 536km main rail line, the approximately 16km WCS spur rail line and a 60 million tonne per year barge wharf.

 

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First production expected in 2025 (Rio Tinto ready to ride the Simandou train)

Once complete, all co-developed infrastructure and rolling stock will be transferred to and operated by the Compagnie du Transguinéen (CTG) joint venture, in which Simfer and WCS each hold a 42.5% equity stake and the Guinean State a 15% equity stake.

First production from the Simfer mine is expected in 2025, ramping up over 30 months to an annualised capacity of 60 million tonnes per year (27 million tonnes Rio Tinto share). The mine will initially deliver a single fines product before transitioning to a dual fines product of blast furnace and direct reduction ready ore.

Simfer’s initial capital funding requirement for the Simandou project is estimated to be approximately USD11.6-billion, of which Rio Tinto’s share is approximately USD6.2- billion.

Rio Tinto ready to ride the Simandou train

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Rio Tinto ready to ride the Simandou train

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