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HomeMarketGuinea's vast Simandou mine on track to start delivering for Chinese investors

Guinea’s vast Simandou mine on track to start delivering for Chinese investors

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After almost three decades of false starts, the massive Simandou iron ore mine in Guinea is on track to deliver a significant breakthrough this year to its Chinese investors and British-Australian mining giant Rio Tinto.

US-based rail manufacturer Wabtec has secured deals worth US$525 million to supply the locomotives that will deliver the first shipments from the Simandou mountain range in the remote forests of southeastern Guinea to the ports.

Simandou, the world’s largest known undeveloped reserve of high-grade iron ore, is strategically important to China, which aims to diversify its suppliers from Australia and Brazil, that together account for about 80 per cent of seaborne exports.

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Wabtec said it had won a US$248 million deal to supply locomotives to Winning Consortium Simandou (WCS), which is developing blocks 1 and 2 of the concession, covering an estimated 1.8 billion tonnes of reserves with an iron content of more than 65.5 per cent.

WCS shareholders include Winning International Group of Singapore, China Shandong Weiqiao Group and the state-owned China Baowu Steel Group.

Baowu, China’s largest steelmaker, has interests in the southern and northern parts of Simandou. In June last year, Baowu Resources completed the acquisition of a 49 per cent share of WCS mine and infrastructure projects.

Simandou’s remaining blocks 3 and 4 are owned by Rio Tinto as part of its Simfer joint venture with the Chinese firm Chalco Iron Ore Holdings and the Guinean government.

First production from the Simfer mine is expected in 2025, ramping up over 30 months to an annualised capacity of 60 million tonnes per year, according to Rio Tinto. Wabtec agreed a few months ago to supply Simfer with a US$277 million locomotive fleet.

After almost three decades of false starts, Guinea’s massive Simandou iron ore mine is on track to deliver its first shipment this year. Photo: Rio Tinto Simfer alt=After almost three decades of false starts, Guinea’s massive Simandou iron ore mine is on track to deliver its first shipment this year. Photo: Rio Tinto Simfer>

Announcing the latest agreement in January, Mpilo Dlamini, Wabtec’s regional vice-president of sub-Saharan Africa, said that Simandou “represents a transformational economic opportunity for Guinea”.

“We are also committed to the development of Guinea by fostering local employment, developing indigenous talent, and empowering local businesses to support the operation and maintenance of this vital rail network,” he said.



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