Rio Tinto's Executive Committee lead for Guinea and Copper Chief Executive, Bold Baatar, expressed gratitude to the Government of Guinea, Chinalco, Baowu, and WCS for their pivotal role in achieving this milestone. The Simandou project promises to deliver a substantial new source of high-grade iron ore essential for the steel industry's decarbonization efforts. Moreover, the trans-Guinean rail and port infrastructure is expected to make a significant economic impact in Guinea.
Under the agreement, Simfer will acquire a stake in WCS project companies responsible for constructing the infrastructure, committing approximately $6.5 billion, Rio Tinto's share about $3.5 billion. This includes funding for Simfer’s development of a 60 million metric ton per year mine in Simandou's Blocks 3 and 4. Concurrently, WCS will develop Blocks 1 and 2, each independently delivering infrastructure components tailored to their respective mining scopes.
The financing structure involves Chalco Iron Ore Holdings fulfilling its share of capital expenditures, totaling approximately $985 million, to advance critical project works up to 2024. Rio Tinto's projected capital expenditure for the entire Simandou project stands at around $6.2 billion, earmarked for both mining operations and co-developed infrastructure.
Simfer and WCS will jointly manage the construction of rail lines and port facilities, strategically divided to optimize operational efficiencies. Upon completion, all infrastructure and rolling stock will transfer to Compagnie du Transguinéen, a joint venture where Simfer and WCS hold 42.5% equity each, with the Guinean State retaining 15%.
Initial production from the Simfer mine is slated for 2025, gradually scaling up to an annual capacity of 60 million metric tons over 30 months. The mine will initially produce a single fines product, transitioning later to a dual fines product suitable for both blast furnaces and direct reduction.
Rio Tinto acknowledges the strategic significance of the Simandou project, reinforcing its commitment to sustainable mining practices and economic development in Guinea. The venture underscores Rio Tinto's leadership in advancing critical mineral resources while fostering long-term partnerships to benefit local communities and stakeholders.
