[Ferro-Alloys.com] Chinese-backed consortium SMB-Winning has won the rights to develop Guinea's major Simandou iron ore deposit, Guinean partner Societe Mineire de Boke confirmed Wednesday.
SMB, together with Singapore's Winning, won a tender to develop Simandou's blocks 1 and 2, offering $15 billion, which will include construction of rail and port infrastructure, SMB's director general, Frederic Bouzigues, told S&P Global Platts.
SMB-Winning was chosen by the Guinea government to develop Simandou as its bid exceeded that of the other main contender, Fortescue Metals Group, which according to media reports had offered $9 billion for the two blocks but had not committed to build the "Transguinean" railway link and port facilities which are considered crucial to the project's success.
Simandou is classed as the world's largest untapped high-grade iron ore deposit, with grades which rival those of miner Vale's high-grade Carajas iron ore deposit in northern Brazil. A project developed for Simandou's blocks 1 and 2 several years ago by Brazil's Vale -- whose rights to the area were later revoked during a dispute with Israeli mining tycoon Beny Steinmetz's BSG Resources -- envisaged high-grade production at the site of some 50 million mt/year. Rio Tinto and the Aluminium Corp of China (Chinalco) have also had unsuccessful involvements with the attempted development of Simandou's blocks 3 and 4.
"Today, China is the world's leading industrial player and therefore the largest consumer of ore for primary processing," Bouzigues said. "It was strategic for Guinea to be able to integrate into this global value chain with the support of several international partners, in order to contribute in the medium term to a first local transformation."
Developing iron-grade iron deposits has become an attractive proposition after a tightness of high-grade ore and pellet feed as a result of mine production curbs following Vale's fatal tailing dam collapse in southeastern Brazil in January led prices to surge to a five-year high. High-grade iron ore also helps steel mills curb carbon emissions as its use requires less coal in the production process. (S&G Global Platts)
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