Rio Tinto about the Simandou iron ore project

Largest untapped iron deposit

Rio Tinto has informed us that the start of production in the Simandou iron ore project (Guinea) will start in 2025. Simandou is the world’s largest untapped high-grade iron ore deposit. According to Rio Tinto’s announcement: “mine concession held an estimated Total Mineral Resource as at 31 December 2022 of 2.8 billion tonnes, of which Rio Tinto is today reporting the conversion of an estimated 1.5 billion tonnes to Ore Reserves that support a mine life of 26 years, with an average grade of 65.3% iron3 and low impurities. Rio Tinto is also reporting Mineral Resources exclusive of Ore Reserves of 1.4 billion tonnes at 66.1% Fe and low impurities.” Moreover, according to the projectile, the new mine output will add ca. 5% of the global iron seaborne supply.

Rio Tinto’s Bold Baatar expressed: “Simandou will deliver a significant new source of high-grade iron ore that will strengthen Rio Tinto’s portfolio for the decarbonization of the steel industry, along with trans-Guinean rail and port infrastructure that can make a significant contribution to the country’s economic development.”

Big investments

The project’s initial funding is estimated at $11.6 billion. The $6.5 billion is needed for co-development infrastructure owned and operated by CTG once completed. The infrastructure consists of 70 km rail-spur, port, and rail infrastructure. The Rio Tinto share is expected to be $2.7 billion in mien and TSV’s and 3$3.5 billion in co-developed infrastructure.

First production from the two blocks which are co-owned by Rio Tinto is expected to ramp up over 30 months from 2025. The operational annual capacity will be 60 million and Rio’s Tinto share will be ca. 27 million tonnes per year.

Investment structure

Rio Tinto owns two (Block 3 and Block 4) of four Simandou mining blocks as part of its Simfer joint venture. The Simfer is the agreement between the Rio Tinto Group (53%) and Chalco Iron Ore Holdings Ltd (Chalco Trading Hong Kong Co., Limited). The rest (Block 1 and Block 2) is part of a Singaporean company, Winning International Group (50%), Weiqiao Aluminium (part of the China Hongqiao Group) (50%), and United Mining Supply SA (nominal shareholding).

The Simandou mining project due to the complex ownership structure and prolonged negotiations, as well as Guinea’s political changes, etc., has been a subject of long negotiations.