Australian company Arrow Minerals has taken a significant step toward accessing the sales market for its Simandou North iron-ore project with the signing of a memorandum of understanding (MoU) with Baosteel Resources Holding.

The agreement represents a significant milestone for Arrow as it seeks to capitalise on the benefits of the Simandou multi-user railway infrastructure.

The MoU provides a framework under which Arrow could sell iron-ore to Baosteel, a subsidiary of the BaoWu Group, the world’s largest steel producer. BaoWu is one of the lead proponents of the Simandou iron-ore project – the largest undeveloped high-grade iron-ore deposit in the world.

The MoU, Arrow MD David Flanagan said on Monday, was an important milestone for Arrow, the Simandou North project and Guinea. “The delivery of multi-user infrastructure will continue to attract significant global investment which in turn will promote the growth of a world-class mining industry. That will result in globally competitive operations, substantial local employment and extensive national benefits.”

“It has taken millions of man-hours, billions of dollars and thousands of pages of contracts for all the joint venture partners, including BaoWu Group, to develop the Simandou iron project, which is due for commissioning in late 2025.”

Flanagan recognised the role that the Guinea government played in facilitating the multi-user infrastructure that would benefit various industries in the region.

Arrow's Simandou North iron project is strategically located adjacent to blocks 1 and 2 of the Simandou project, allowing for operational synergies. Since beginning field activities in 2023, Arrow has completed 521 drill holes totalling more than 10 300 m and plans to move towards resource drilling and scoping studies in 2025.

The Simandou project is a partnership between Rio Tinto, Chalco Iron Ore Holdings (CIOH), and a Chinalco-led consortium, Winning Consortium Simandou (WCS), Baowu and the Guinea government.

WCS is the holder of blocks 1 and 2, while, Simfer, a joint venture between Rio Tinto Group and CIOH, holds blocks 3 and 4.

The new 600 km multi-use trans-Guinean railway together with port facilities will allow the export of up to 120-million tonnes a year of mined iron-ore by Simfer and WCS from their respective Simandou mining concessions in the south-east of the country.