Name of the Project
Simandou iron-ore project.

Location
Guinea.

Project Owner/s
Simandou’s mining concession is divided into four blocks.

The 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.

Simfer Jersey Limited is a joint venture (JV) between the Rio Tinto Group (53%) and CIOH (47%). CIOH is a Chinalco-led JV of leading Chinese State-owned enterprises: Chinalco (75%), Baowu (20%), China Rail Construction Corporation (2.5%) and China Harbour Engineering Company (2.5%).

Simfer is the holder of the mining concession covering Simandou blocks 3 and 4, and is owned by the Guinean State (15%) and Simfer Jersey Limited (85%). Simfer Infraco Guinée will deliver Simfer’s scope of the co-developed rail and port infrastructure, and is a wholly owned subsidiary of Simfer Jersey Limited, but will be co-owned by the Guinean State (15%) after closing of the co-development arrangements.
 
WCS is a consortium of Singaporean company Winning International Group (50%), Weiqiao Aluminium (50%, part of the China Hongqiao Group) and United Mining Supply Group (nominal shareholding). WCS is the holder of Simandou North blocks 1 and 2 (with the government of Guinea holding a 15% interest in the mining vehicle and WCS holding 85%) and associated infrastructure. Baowu Resources has entered into an agreement to acquire a 49% share of WCS mine and infrastructure projects through a Baowu-led consortium, subject to conditions, including regulatory approvals. In the case of the mine, Baowu has an option to increase its shareholding  to 51% during operations.

Project Description
The Simandou project comprises three core elements – a mine, railway and port, as well as associated infrastructure.

The Simfer JV’s mine concession holds an estimated 2.8-billion-tonne mineral resource, of which 1.5-billion tonnes were converted to ore reserves that support a mine life of 26 years, with an average grade of 65.3%.

There will be an openpit iron-ore operation in the Simandou range, in south-eastern Guinea, with an expected peak production of between 95-million and 100-million tonnes a year.

WCS’s blocks 1 and 2 are expected to produce 60-million tonnes a year, and Rio's blocks 3 and 4 about 40-million tonnes a year.

The project includes an estimated 670 km railway to transport the iron-ore from the mine to the Guinean coast and a new deep-water port south of Conakry, on the Morebaya river.

Associated developments to provide utilities and supporting infrastructure for the project include construction facilities, and access to materials, power generation, water, access roads and accommodation.

New infrastructure will become State property upon completion.

Construction of the project will be undertaken in two stages.

During the first stage, the southern Ouelaba mine site will be developed, which will include the construction of the railway and port to a capacity of about 60-million tonnes a year.

The second stage will result in the northern Pic de Fon mine site being brought on line and the capacity of rail and port facilities being expanded, increasing production to between 95-million and 100-million tonnes a year.

The mine will be the biggest integrated mine-and-infrastructure project ever developed in Africa.

Potential Job Creation
It is estimated that the project will create 10 000 direct jobs and more than 100 000 induced jobs, as well as employ more than 3 500 local subcontractors.

The current total workforce across the project is 10 800, with 85% national Guinean participation.

Present Value/Internal Rate of Return
Not stated.

Capital Expenditure
Simfer's capital funding requirement for the Simandou project is estimated at $11.6-billion, of which Rio Tinto's share is $6.2-billion.

Planned Start/End Date
First production from the Simfer mine is expected in 2025.

The Simandou project will be completed and put into operation in 2026.

Latest Developments
As reported in Rio Tinto’s second-quarter operations review, all the conditions for the company’s investment to develop the Simandou deposit have been met, with the transaction having closed in July 2024.

Rio Tinto reports in its operations report for the third quarter ended June 30, 2024, that the Simfer mine is on track to deliver first production in 2025, ramping up over 30 months to an annualised capacity of 60-million tonnes a year. 

The mine is progressing to plan, despite productivity being impacted on by wet weather during the quarter. Mine process plant installation early works and nonprocess infrastructure contracts have been awarded. First blasting activities on Rio Tinto’s mining concession have also taken place. 

The two initial crushers required to produce first ore for commissioning have also arrived in Guinea.

During the third quarter, several critical milestones were achieved for the Simfer infrastructure scope. The laying of sleepers and track has started, with progress expected to accelerate in the fourth quarter with the arrival of track-laying locomotives. 

For the bridge construction works, Rio Tinto has completed the piers and started laying bridge platforms. Tunnel excavation activity is now more than 50% complete and activities at the port have advanced, with transshipment vessel wharf construction and car dumper excavation having started.

Key Contracts, Suppliers and Consultants
Fluor (construction contractor); and NRW Holdings (earthworks contract).

Contact Details for Project Information
Rio Tinto, tel +44 20 7781 2000 or email media.enquiries@riotinto.com.
Chalco, tel +86-10 8229 8103.
WCS,  tel +224 613 55 55 55 or email info@winningafrica.net.