Guinea Greenlights Major Iron Ore Project with Global Giants

• The National Transition Council of Guinea approves a joint venture to develop the Simandou iron ore mining project, with an estimated 2.4 billion metric tonnes of reserves, aiming for production to begin in the first quarter of 2026.
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• The project includes the construction of a 670-kilometer railway and a deep-water port to facilitate the export of iron ore, primarily to Chinese steelmakers.
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• Meanwhile, Russia's Elgaugol plans to construct a 530-kilometer rail line to connect the Elga coking coal mine to the Elga port, boosting coal export capacity to the Asia-Pacific region.
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Via Metal Miner  Mar 08, 2024

The West African state of Guinea recently approveda joint development deal between the government, Rio Tinto/Simfer, and the Winning Consortium Simandou (WCS) consortia to develop the Simandou iron ore mining project.

The National Transition Council (NTC), Guinea’s legislative body under the interim regime, announced the deal’s approval on February 3. “In short, this agreement provides for…the construction of railway and port infrastructure, no later than December 31, 2025 and the start of iron ore production in the first quarter of 2026,” NTC said in a statement.

Simandou has 2.4 billion metric tonnes of estimated reserves, from which it can produce 2.25 billion metric tonnes of 65% Fe iron. Under the agreement, WSC will develop Blocks 1 and 2, while Rio Tinto / Simfer will develop the remaining two blocks. Combined, this represents over 1.46 million square kilometers of iron ore mining potential.

The Rio Tinto / Simfer consortium comprises the metals and mining multinational, which holds 53% in the two blocks. Meanwhile, the Simfer joint venture between Chalco Iron Ore Holdings and the Guinean government holds the remaining percentage in Blocks 1 and 2. Finally, Singapore-headquartered conglomerate Winning International Consortium, China’s Weiqiao Aluminium, and London-registered United Mining Suppliers comprise WSC.

An Untapped Resource Hub for Iron Ore Mining

Simandou is in Nzérékoré Region of southern Guinea, roughly 900 kilometers away from the capital and port city of Conakry. The council also mentioned the potential construction of a steel mill with an annual capacity of 500,000 metric tonnes, though it did not indicate if that would be crude steel or cast and rolled products.

NTC added that work is also underway to construct a 670-kilometer, double-tracked line to Forécariah Prefecture on the Atlantic coast and a deep-water port at that site. Currently, it seems Chinese steelmakers will be the likely end-users of Simandou iron ore.

Switching from Iron Ore Mining to Coal: Russia’s Elga Port

According to a Russian media report, Russian coking coal producer Elgaugol plans to finish constructing a 530-kilometer rail line to connect the Elga coking coal mine directly to the Elga port. The planned port is on the Sea of Okhtosk, which gives access to the Pacific Ocean. Company information states that the site will have a through capacity of 30-50 million metric tons.

he Elga coal deposit is located in the southeastern part of the Sakha Republic and is one of the largest untapped coal deposits in the world. The Elga coal complex includes a coal mine, a washing plant, and infrastructure for transporting the coal. Under the current setup, coal from the mine travels along a 360-kilometer rail branch that connects with Russian Railway’s (RZhD) Baikal-Amur Mainline at Ulak. Cargoes then travel at least 1,000 kilometers south to ports in eastern Russia for export.

Elga Port Impact on Global Trade

Information on Elgaugol’s website also indicated that the Elga open-pit coal mine has up to 2.2 billion metric tonnes of JORC-compliant resources. It also achieved annual production of 45 million metric tonnes in 2023. The site likewise noted that steelmakers in the APAC region are the primary end users of Elgaugol’s coal.

Russian metals and mining company Mechel developed the coal mine and built the original rail connection of this century, with production starting in 2012. However, the group sold it to Moscow-headquartered A-Property conglomerate in 2020 in an effort to restructure its debts. Mechel was also losing money on the rail link and wanted RZhD to take control of it in 2016, though reports now indicate that the railroad was reluctant to do so.

By Christopher Rivituso