Simandou is Africa’s largest integrated greenfield mining and infrastructure project ever to be launched. In the presence of the President of the Republic of Guinea, the project partners WCS, Baowu, Chinalco and Rio Tinto celebrated the commencement of operations on 11 November. With the Simandou megaproject, the West African country is emerging as a global player for high-quality iron ore in direct reduction quality.
Simandou is under exploitation by two large consortia: licence blocks 1 and 2 are operated by the Winning Consortium Simandou (WCS), with the China Baowu Group (Baosteel and Wuhan Iron and Steel) as the largest shareholder. Competitor Simfer mines the iron ore from the two blocks 3 and 4 located to the south. The British-Australian mining company Rio Tinto holds a majority stake in this consortium. The project includes the construction of a railway line extending around 670 kilometres to the Atlantic Ocean and the port of Morebaya in Guinea, which is currently under construction, as well as port facilities for barges and transshipment vessels. Once commissioned and ramped up, this infrastructure will support the export of up to 120 million tonnes per year of mined iron ore by SimFer and WCS from their respective mining concessions in Simandou in the south-east of the country. Testing and commissioning of the mine, railway and barge port infrastructure is under way, according to Rio Tinto, with both WCS and SimFer having begun transporting iron ore from the mine to the port via the trans-Guinean railway line.
Once fully operational at the end of 2025, all jointly developed infrastructure and vehicles will be transferred to and operated by the Compagnie du TransGuinéen (CTG), in which Simfer and WCS each have a 42.5 per cent shareholding, while the government of Guinea holds the remaining 15 per cent.
Simandou supplies high-quality iron ore in DRI quality
The Simandou project is more than just a mining project; it is considered a geopolitical move and a pivotal moment for global decarbonisation efforts. With the Simandou deposit in the south-east of the country, Guinea has an estimated two billion tonnes of iron ore. When the four mines in the area are operating at full capacity, production stands at 120 million tonnes per year. Compared to the industry giants, the pure production volume may sound modest. Australia, by far the largest iron ore producer, produced around 960 million tonnes in 2023, followed by Brazil in second place with 440 million tonnes. But even more than its potential production volume, Simandou is important for the global decarbonisation of the steel industry due to the high quality of the iron ore. The high degree of purity allows the iron ore to be processed in CO2-saving direct reduction instead of in conventional blast furnaces. The Chinese steel giant Baosteel is building a steelworks in the province of Gouangdong based on direct reduction, which is to be supplied with iron ore from Simandou.
Hu Wangming, Chairman of the China Baowu Group, is certain: “The stable supply of high-quality iron ore resources from Simandou will lay a solid foundation of low-carbon raw materials for the development of China’s steel industry and the global steel sector. We are firmly convinced that this exemplary cooperation will provide a lasting boost to the economic and social development of Guinea, the project’s host country.”
Rio Tinto CEO Simon Trott is also confident: “We are developing an exceptional new source of high-quality iron ore that is in demand from customers for the production of low-carbon steel, adding to our world-class portfolio of iron ore mines in Pilbara (Australia) and Canada.”
Source: Rio Tinto, Business Insider Africa, GTAI
