A Pilbara ‘killer’ resources project will proceed after securing crucial finance.
Investors recently approved $15 billion (A$22.6B) in funding agreements for the $26B Simandou mine, 526km southeast of Conakry.
The money will pay for new rail and port infrastructure that a joint venture (JV) between Rio Tinto, China-backed Winning Consortium Simandou (WCS) and the Guinean government will construct.
The JV entity is called Compagnie du Trans-Guinéen.
“Simandou is no longer a dream but a reality. There is no doubt that the project will be delivered on schedule by the end of December 2025,” head of the government’s strategic committee Djiba Diakite said according to Bloomberg.
Rio CEO Jakob Stausholm inspected the mine site via helicopter back in November 2023.
The project involves constructing a proposed 60 million tonnes per annum (Mtpa) mine, rail and port infrastructure, associated infrastructure. An estimated 45,000 jobs will be created.
Total initial capital expenditure has already reached US$11.6B (A$17.6B) for the following components:
- US$7.8B (A$11.8B) Simandou South mine (blocks three and four)
- US$5.4B (A$8.2B) 70km rail-spur from mine to mainline, rolling stock and new 60Mtpa transhipment vessel port
- US$4.6B (A$6.9B) 536km heavy haul rail mainline and 16km WCS rail spur.
Rio’s board of directors have already approved investing US$6.2B (A$9.4B) in the mine while Guinean Government-funded Simfer entity will spend a further US$5.4B (A$8.2B).
“The board … sanctioned the biggest mining project in the world … [and] I am very pleased that we as Rio Tinto can now, in a more unconstrained way, grab the opportunities in this world,” Stausholm previously said.
Rio, the Simfer JV, WCS and Republic of Guinea earlier agreed to jointly build a 670km long railway line between the mine and domestic ports.
The decision was reached despite the longer, cross-country route costing significantly more. Proponents had wanted to build a railway line to the nearest port in neighbouring Liberia. This shorter route would be covered in the original US$12B (A$17.7B) to US$20B (A$31B) infrastructure expenditure.
Other project partners include Chalco Iron Ore Holdings and Baowu.
