As the Rio Tinto-led (ASX, LSE: RIO) $23.5-billion Simandou iron ore mine started officially this week in Guinea, the West African country under military rule said it wants to expand the industry with refineries.
The country plans to fast track development of alumina processing and iron ore pellet plants as part of long-standing ambitions to integrate mining with downstream opportunities, the Guinean mining minister told reporters, according to a BMO Capital Markets note on Tuesday.
“Specifically, the country wants to install five to six alumina refineries by 2030, which would boost capacity to around 7 million tonnes a year,” BMO commodities analysts Helen Amos and George Heppel said. “Currently, there is only one active alumina refinery in Guinea, the Friguia facility, which has an annual capacity of around 650,000 tonnes. Last year, Guinea signed a non-binding agreement with Emirates Global Aluminium to construct a refinery, potentially in partnership with Chinalco.”
Simandou, when linked with a new deepwater port at the end of 600 km of rail line, is described as Africa’s largest greenfield mine, rail and port infrastructure project. The first iron ore from the mine was shipped by train on Oct. 20, according to a social media post by consortia member Winning International, BMO Capital Markets said on Monday. The first shipload is still planned to leave port this month, it added.
Simandou output
“We currently assume combined shipments of 38 million tonnes in 2026 in total from the Simfer and Winning Consortium JVs, and full capacity of 120 million tonnes per annum achieved by 2029,” BMO’s Heppel and Amos wrote. “However, with global depletion running at 3-5% per year (75-125 million tonnes a year), we maintain that Simandou is effectively a replacement project and we remain above consensus for iron ore prices ($106 per tonne for 2026).”
Guinea President Mamady Doumbouya, Rio Tinto and representatives from the mostly Chinese companies in two consortia running Simandou gathered Tuesday at the Atlantic port of Moribayah to formally inaugurate the project. It’s been in development for decades.
“Today we are unlocking an exceptional new source of high-grade iron ore that is in demand from customers for low-carbon steel making,” Rio Tinto CEO CEO Simon Trott said in a release. “This outstanding achievement has been made possible through the dedicated hard work of thousands of our colleagues.”
Consortia JVs
Simandou’s blocks three and four are held by SimFer, owned 53% by Rio Tinto and 47% by Chalco Iron Ore Holdings — a joint venture of Chinalco, Baowu Steel, China Rail Construction — and China Harbour Engineering, with Guinea holding 15%.
Blocks one and two are controlled by Winning Consortium Simandou, comprising Singapore’s Winning International, China Hongqiao’s Weiqiao Aluminium, and Baowu Steel, with the Guinean state also holding 15%.
One of the most storied projects of recent decades, Simandou, tucked away in Guinea’s mountainous south, lay in a state of suspended animation for years. The Simandou mountains are home to the world’s largest known untapped deposit of high-grade iron ore.
“Simandou is more than a mining project: it is the driving force behind a national transformation,” Djiba Diakité, Chief of Staff to President Doumbouya, said in the release. “This inauguration marks a foundational milestone for Guinea.”
– With files from Mining.com.
Be the first to comment on "Guinea looks downstream past Simandou start"