Rio Tinto’ board of directors gives a go ahead to the Simandou project

The Danish CEO of Rio Tinto announced to the Financial Times on Wednesday, Feb. 21, 2024 that the board of the agnlo-australian group Rio Tinto has given green light to the Simandou mega project.

This is a major step in the implementation of the Simandou project, which is, to date, "the largest integrated mines-infrastructures project in Africa and in the world", according to Bold BAATAR, the head of Rio Tinto's copper division.

It should be noted that Rio Tinto partnered with the Chinese state-run Chalco Iron Ore Holdings (CIOH) to develop its Simandou project, named after the mountain range located in south-east of Guinea, home to the "largest and richest untapped iron ore resrerves in the world, estimated at over 2 billion tons". Hence, Rio Tinto has 53% of stakes in the created joint-venture, while Chalco owns the remaining parts.

In addition the Simandou mountain nange is divivded into four blocs: blocs I and II belonging to Rio Tinto and its partner Chalco. Blocs III and IV, having been subject to a legal wrangling between the Guinean state and the group owned by the French-Israeli Benny STEIMETZ upon Alpha CONDE's arrival to power, finally got granted to the Winning Consortium Simandou (WCS) with Sino-Singapore-Guinean ownership.

The development of these blocs requires a huge investment, estimated at about $ 20 billion. This involved the incorporation of la Compagnie du Transguinéen (CTG) in March 2022 with the following ownership structure:

  • 42,5% owned by Rio Tinto Simfer
  • 42,5% owned byWCS
  • 15% free carry equity stake for the Guinean state.

The newly created CTG is aimed at building and operating required port and rail infrastructures to transport the iron ore that will be mined from the two future mines to be developped by Rio Tinto and Chalco on one side, and by Winning Consortium Simandou on the other side. Production is expected to start as early as 2025.

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