Following three decades of negotiation, planning, funding issues and even a government coup, the world’s largest mining project will finally get underway this year – Simandou, the Rio Tinto-led, $20bn iron ore, rail, and port development in Guinea.
The project has picked its way through shifting interest and prices over past years, as it’s battled to come to fruition. But now the high quality of iron ore available from the Simandou mountains – better than 65% – is considered worth the enormous outlay and effort to recover it, (especially with other more easily accessible sources becoming steadily exhausted). One of the seven other partners in the project went so far as to describe it as the ‘caviar’ of iron ore. Others told the Financial Times that there was simply “nothing else out there of this scale and size.”
Five of the partners are Chinese, and China also sees Simandou as a way of trialling new procedures that could take significant steps to decarbonising its steel industry. Principally the use of hydrogen and carbon monoxide to process the ore, instead of coal-based fuel like coke. It’s a more sustainable method, but one that requires high quality iron ore to work convincingly.
The project will include two mines, a deep-water port near Guinea’s Conakry capital, and a 400-mile rail system.
Today Simandou is the world’s largest, untapped, high grade, iron ore deposit. Last year Rio Tinto reported that the location held an estimated total mineral resource, as of 31 December 2022, of 2.8 billion tonnes, of which the conversion of an estimated 1.5 billion tonnes to ore reserves would support a mine life of 26 years, with an average grade of 65.3% iron and low impurities.
Rio Tinto first secured an exploration licence for the site back in 1997. Part of the delay since then (not counting the 2021 Guinean coup) has been down to assembling the number of partners required to fund such a massive enterprise. Rio Tinto’s CEO Jakob Stausholm confirmed in February that the board had finally approved the project, expected to create 45,000 jobs, telling the Financial Times “Early November I was out there. I flew over the rail line, the mines, and the port in a helicopter. It is amazing what has happened.”
The major infrastructure work is expected to start this year, with the first ore being processed in 2025.