China set to approve development of Guinea’s Simandou iron ore mine
China is close to giving the go-ahead for some of its biggest state-owned companies to develop the giant Simandou iron ore mine in Guinea, potentially paving the way for the project to be built after years of legal wrangling. China Development Bank is likely to provide some of the funding and Asian Infrastructure Investment Bank is also being considered.
China’s State-owned Assets Supervision and Administration Commission, which oversees the biggest government-owned enterprises, is actively pushing forward with the project -the world’s biggest untapped iron ore deposi. Simandou was practically forgotten by the wider mining industry as owners including Rio Tinto Group, Israeli billionaire Beny Steinmetz and authorities in the West African nation fought over rights to develop it.
Simandou is divided into four blocks, with blocks 1 and 2 controlled by a consortium backed by Chinese and Singaporean companies, while Rio Tinto Plc and Aluminum Corp. of China, known as Chinalco, own blocks 3 and 4. Chinalco will be involved in the development and SASAC is talking to other state-owned enterprises about building costly port and rail infrastructure.
The cost of building a 650km (400 mile) railway stretching across Guinea has always been a roadblock for developers, with estimates reaching as high as $13 billion. With Chinese funding, the project becomes much more feasible.
