A Pilbara ‘killer’ project is one step closer to construction.
Rio Tinto recently confirmed it would invest US$100 million (A$155.3M) in the new Simandou mine, 526km southeast of Conakry.
The money will pay for early rail and port construction plus ongoing studies. This is promised to keep the $26 billion project running until a final feasibility study and funding pact is reached between all proponents and the government.
“We signed an investment agreement with our partner Winning Consortium Simandou (WCS). Through this agreement, Rio Tinto will … finance its construction programme,” Guinea acting general director Samuel Gahigi said on LinkedIn.
Gahigi revealed enabling work, accommodation camp construction and recruitment is well underway.
“[We are also] starting permanent construction works,” he said.
“We are determined to deliver the Simandou project.”
Rio, the Simfer joint venture, WCS and Republic of Guinea all agreed to build a 670km long railway line between the mine and domestic ports.
The decision was reached despite the longer, cross-country route costing more than US$800 million (A$1.2B). Proponents had wanted to build a railway line to the nearest port in neighbouring Liberia. This shorter route would be covered in the original US$12B (A$17.7B) to US$20B (A$31B) infrastructure expenditure.
The mine is home to one of the world’s “best undeveloped” mineral deposits. It is widely speculated to be resource-rich enough to devalue, compete against and possibly replace Western Australia’s Pilbara exports.
The project requires constructing the railway, associated infrastructure and both mine and port facilities before the end of 2024. On completion the operation would produce up to 150M tonnes a year of “world class” product from a combined 2B tonnes at 65 per cent grade. It would also create an estimated 45,000 jobs.
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