Talks underway to resume iron ore project in Guinea
Published: Mar 15, 2022 09:42 PM
iron ore Photo:VCG

Iron ore Photo:VCG

Company representatives and officials are actively seeking a joint solution to a quick resumption of work at the Simandou project in Guinea, which has the world's largest untapped iron ore reserves, the Global Times has learned. The project was suspended last Friday by Guinea's interim government.

The Simandou project, jointly owned by several international conglomerates, including Singapore's Winning International Group, a number of Chinese-funded enterprises and Rio Tinto, has made slow progress for various reasons such as political instability, costly infrastructure input for mining and the distribution of shares.

The Guinea's government had suspended all four blocks of the Simandou project, people familiar with the matter said.

The Guinean government is trying to promote the joint development of all four blocks, but due to historical factors, corporate ideas and other reasons, there are many technical obstacles to this goal, insiders said.

"At present, all parties are maintaining communication, actively negotiating, and working hard to promote the resumption of the project," according to a person who familiar with the matter.

Although no conclusion has been reached yet, after a series of communications and negotiations, the Guinean government is expected to make a unified plan for the development of Simandou, the Global Times learned.

Guinea's government on Friday ordered the halt of all construction activities at the Simandou iron ore deposit, saying that it was seeking to clarify how the country's interests will be preserved, according to Reuters.

Rio Tinto told the Global Times that it is committed to developing the Simandou project in the best interests of all parties, including the government of Guinea and broader Guinean society.

"We share the Government of Guinea's desire to see cooperation and co-development, high environmental, social and governance standards, and job creation in support of Guinea's development," Rio Tinto said.

Other participating parties cannot be reached for comment as of press time.

The Guinean government said any mine developer must build a railway across the country to ensure that the iron ore mined in Simandou is exported from Guinea's own ports, which greatly increases the cost of mine development. It's also not what the miners originally intended, which was to ship iron ore via ports in neighboring Liberia, a much shorter route.

Due to the complicated political situation in Guinea and other factors, the deposit has changed hands several times and has not been effectively developed, despite having the largest iron ore reserves and the highest quality in the world.

Data from Huarong Futures showed that the deposit has a total resource of more than 10 billion tons. Of this, the iron ore resource is 2.25 billion tons, and the proven iron ore grade is about 66-67 percent, which is much higher than the global average.

Annual output is expected to reach 150 million tons, according to media reports.

If development is to be carried out in a unified way, the relevant companies might have to adjust the original operation plan, Wang Guoqing, research director at the Beijing Lange Steel Information Research Center, told the Global Times on Tuesday.