'Worlds biggest mining project' to begin this year

According to a report published in The Financial Times, mining company Rio Tinto first secured an exploration licence of the grounds, located in the Simandou mountains in south-eastern Guinea, 550km from the coastal capital, in 1997.

A long period of political instability in the area followed the purchase, however, including two coups d’état, as well as court battles regarding the ownership of the land and corruption allegations.

This year, Rio Tinto’s Chinese partners received the last approval from Bejing, allowing the company to begin work on the project–which due to its scale, will be a partnership between the mining giant, the Guinean government, and seven other companies, including five from China.

“There is nothing else out there of this scale and size,” Rio Tinto’s chief executive of copper, Bold Baatar, told the Financial Times in a recent interview.

Rio Tinto will build one iron ore mine — known as the Simfer project — in partnership with a consortium led by the world’s largest aluminium producer, Chinalco.

A second mine — known as the WCS project — will be built by Baowu, the world’s biggest steel producer, in partnership with a consortium led by Singapore-based Winning International Group. At the same time, the parties will co-finance the construction of a 552km railway through Guinea’s mountains to the sea and the development of a deepwater port on its Atlantic coast.

A driving force behind the project has been that Simandou’s high-grade ore is highly attractive, given the need to decarbonize steelmaking, according to Baatar. “The fundamental shift in the last number of years has been that the world is far more in agreement on climate change,” he said. To cut emissions, processes such as DRI require high-grade iron ore, which is increasingly hard to find in large quantities. The ore Rio Tinto plans to extract from Simandou has an average iron content of greater than 65%, among the highest in the world–which Baatar referred to as the ‘caviar of iron ore’.

“A part of the ore body that we’re looking at is very suitable, we think, for direct reduction iron,” he added. “The only way the steelmaking industry globally decarbonizes is if China decarbonizes.”

Source: The Financial Times