Guinea halts Simandou iron ore project again

  • Friday, July 8, 2022

  • Keywords:Guinea Simandou iron ore project
[Fellow]“We don’t expect this to drag on much longer than a couple of months,” he anticipated.
Guinea’s mines minister has once again ordered a full suspension of activities related to the Simandou iron ore mine project after the two companies involved missed an extended deadline to agree on a joint venture.
It halted construction of the mine and related infrastructure once before, in March, pushing Rio Tinto and WCS to sign a framework agreement to “co-develop” infrastructure surrounding the project, including a 670 kilometre railway and a port.
The vast deposit, in the country’s southeast, has not been developed since Rio Tinto first obtained an exploration licence for it 25 years ago.
At two billion tonnes in iron ore reserves and some of the highest grades in the industry (66% – 68% Fe, which attracts premium pricing), Simandou is one of the most easily exploitable iron ore deposits outside of Australia’s Pilbara region and Brazil.
At full production, the mine is expected to export up to 100 million tonnes per year. Simandou would by itself be the world’s fifth-largest producer behind Fortescue Metals (ASX: FMG), Vale (NYSE: VALE) and BHP (ASX: BHP).
Guinea has said any developer of the mine must build a railway spanning the country, even though it adds significant costs and the route to port through neighbouring Liberia is much shorter.
Eric Humphery-Smith, Senior Africa Analyst at risk intelligence company Verisk Maplecroft, wrote in March that Guinea’s decision to suspend all activities at Simandou reflected mostly the “power struggle” between the companies and Guinean authorities regarding recommendations they made in December in relation to the rail and port infrastructure. 
“We don’t expect this to drag on much longer than a couple of months,” he anticipated.
  • [Editor:kangmingfei]

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