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Guinea to host world’s biggest mining project
After a 27-year wait marred by setbacks, scandals, and political changes in Guinea, the world's largest mining project is set to begin this year.
Rio Tinto, a UK-listed company, secured an exploration license in 1997 for the Simandou mountains in south-eastern Guinea, and now, in 2024, the $20 billion iron ore, rail, and port development is gaining momentum.
In a recent interview with the Financial Times, Bold Baatar of Rio Tinto said, "There is nothing else out there of this scale and size."
Financial Times reported that the project, located 550km from Guinea's coastal capital, involves partnerships between Rio Tinto, the Guinean government, and at least seven other companies, including five from China.
Two major mines, Simfer project and the WCS project, will be constructed by Rio Tinto-Chinalco, the world’s biggest aluminium producer and Baowum, the world’s biggest steel producer in partnership with Winning International Group consortiums, respectively.
A 552km railway through Guinea’s mountains towards the sea and a deepwater port on Guinea's Atlantic coast will also be developed.
According to Baatar, the project is too expensive for any single miner to develop alone. The projected share of the total cost for Rio Tinto only is estimated to be $6.2 billion.
“Historically, when you look at the mining industry, each mine had their own infrastructure. The capital number is so big for any single party, Baatar said during his interview with Financial Times.
Simandou in the south-east of the Republic of Guinea is believed to be the world’s largest deposit of untapped high-grade iron ore.
In March 2023, Guinean authorities and shareholders including Rio Tinto agreed on the terms of a joint venture to mine Simandou which paved work for the resumption of the project after years of setbacks, international media Reuters reported.
Baatar said groundwork has commenced, and once Beijing approves Chinalco's investment, construction of the mine will follow.
To address environmental concerns including carbon emissions, Rio Tinto and partners are exploring alternative methods like direct reduced iron technology, utilizing hydrogen and carbon monoxide instead of coke.
This process demands high-grade iron ore, which is hard to come by. However, with Simandou’s average iron content exceeding 65%, among the world’s highest, the process is possible.
According to Baatar, the first ore shipments from the factory are expected in 2025, with production scaling up to reach 60 million tonnes annually by 2028, contributing roughly 5% to the global seaborne iron ore market.
