Agreements reached on trans-Guinean infrastructure in milestone for Simandou iron ore project

Rio Tinto and the Simfer joint venture (Simfer) reached an important milestone by concluding key agreements with the Republic of Guinea (West Africa) and Winning Consortium Simandou (WCS) on the trans-Guinean infrastructure for the world class Simandou iron ore project.

Simandou is home to the last known, largest and richest untapped high-grade iron ore deposit in the world. Simandou’s mining concession is divided into 4 blocks. Rio Tinto Simfer—a joint venture between Rio Tinto, Chalco Iron Ore Holdings (CIOH), and the Government of the Republic of Guinea—will develop blocks 3 and 4, known as the Simandou project.

Aerial view of Simandou project.

The Co-Development Convention with the Republic of Guinea and associated agreements adjusting Simfer and WCS’s existing mine conventions create the legal framework for the co-development of more than 600 kilometers of new multi-use rail together with port facilities that will be used to export iron ore from the Simandou mining concessions in the southeast of the country.

With these agreements we have reached an important milestone towards full sanction of the Simandou project, bringing together the complementary strengths and expertise of Rio Tinto and our partners, the Government of Guinea and Winning Consortium Simandou, for the infrastructure that will unlock this world class resource. Simandou, the world’s largest known undeveloped supply of high-grade, low-impurity iron ore, will strengthen Rio Tinto’s portfolio by complementing our existing Pilbara and Iron Ore Company of Canada products.

—Rio Tinto Executive Committee lead for Guinea and Copper Chief Executive Bold Baatar

The infrastructure capacity and associated cost will be shared equally between Simfer (blocks 3 and 4 of the Simandou project), and WCS, which is developing blocks 1 and 2. China Baowu Steel Group has also previously entered into a term sheet agreement with WCS that may see it partner in the WCS scope for blocks 1 and 2 of the Simandou mining concession and the infrastructure joint venture.

The Co-Development Convention requires ratification by the Guinean State. It is also subject to a number of conditions, including the Guinean State’s approval of the final feasibility study for the project. Negotiations continue between the partners to finalise the investment agreements and related shareholders’ agreements which underpin the co-development. A further announcement will be made when appropriate concerning these agreements.

Critical path works continue to be progressed by the partners to ensure progress is maximized during the 2023-24 dry season.

The Simfer joint venture comprises Simfer S.A., the holder of Simandou South Blocks 3 & 4, which is owned by the Government of Guinea (15%) and Simfer Jersey Limited (85%). In turn, Simfer Jersey Limited is a joint venture between the Rio Tinto Group (53%) and Chalco Iron Ore Holdings (47%)—a Chinalco-led joint venture of leading Chinese SOEs (Chinalco (75%), Baowu (20%), China Rail Construction Corporation (2.5%) and China Harbour Engineering Company (2.5%).

WCS is a consortium between Winning International Group (49.99%), Weiqiao Aluminium (part of the China Hongqiao Group) (49.99%) and United Mining Suppliers (0.0002%).

In December 2022, Human Rights Watch noted that “Simandou’s deposits, which contain enough iron ore to build more than 500,000 Eiffel Towers, have for years remained untapped due to corruption allegations, disputes over ownership, Guinea’s political instability, and the area’s remote and difficult terrain.”

The organization further noted that “The mining companies developing Simandou have promised to respect strong human rights and environmental standards, but their track record in Guinea means that the project deserves the closest possible scrutiny.”