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March 14, 2022

Guinea junta suspends Rio Tinto’s Simandou iron ore project

The Simandou deposit is estimated to hold high-grade iron ore reserves exceeding two billion tonnes.

Guinea’s ruling junta has ordered Rio Tinto and its partners to cease all activities at the Simandou iron ore deposit, reported Guineematin.com.

Guinea interim president Mamady Doumbouya said that it is was unclear how the mine will preserve national interests and is seeking clarification.

Government spokesperson Ousmane Gaoual Diallo was cited by Guineematin.com as saying in the report of the Council of Ministers: “The President of the Transition recalled that he had requested the implementation of the exploitation of the Simandou deposit taking into account the interests of Guinea.

“Unfortunately, to date, despite his request, which dates from December 2021, there has been no progress.

“He therefore instructed the cessation of all activity on the ground pending the answers to the questions posed to the various actors and the clarification of the modus operandi in which Guinea’s interests will be preserved.”

According to estimates, the Simandou mine holds more than two billion tonnes of high-grade iron ore reserves.

The mine could export up to 100 million tonnes a year once it reaches full production capacity.

However, the mine has been entirely untapped even after decades of its discovery due to the cost of building infrastructure and legal disputes.

Rio Tinto currently owns a 45% stake in Blocks 3 and 4 of Simandou deposit whereas Aluminum Corp. of China and Guinea’s Government own 40% and 15% stakes respectively.

China-backed SMB Winning Consortium controls the Blocks 1 and 2 of the Simandou project.

According to a source with direct knowledge of the project, Rio Tinto and WCS have been urged by Doumbouya to assess ways to collaborate on a ‘costly railway’ to ship production from the Simandou project.

Work was started by SMB Winning Consortium on a 650km railway that will connect the project to the deepwater port, according to Mining.com.

However, details were not disclosed on whether or how Rio Tinto and WCS would work on the 670km ‘Transguinean’ railway.

The Guinea Government said that mine developers will build a railway that would span the country, even though it would significantly add to the cost of project development.

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