Multinational employers revealed how they plan to construct a Pilbara ‘killer’ mine.
Rio Tinto and four other proponents recently reached a mutual agreement on their $26 billion Simandou mine, 526km southeast of Conakry.
Rio will invest US$6.2 billion (A$9.4B) in developing the 60 million tonnes per annum (Mtpa) mine, rail and port infrastructure project. The Guinean Government-funded Simfer entity will spend a further US$5.4B (A$8.2B).
This brings a total initial capital expenditure of US$11.6B (A$17.6B) for the following components:
- US$7.8B (A$11.8B) Simandou South mine (blocks three and four)
- US$5.4B (A$8.2B) 70km rail-spur from mine to mainline, rolling stock and new 60Mtpa transhipment vessel port
- $4.6B (A$6.9B) 536km heavy haul rail mainline and 16km Winning Consortium Simandou (WCS) rail spur.
Other project partners include Chalco Iron Ore Holdings and Baowu.
The mine concession is estimated to contain a total mineral resource of 2.8B tonnes, converted into 1.5 billion tonnes of ore reserves that support a 26-year mine lifespan. An average grade of 65.3 per cent iron and low impurities is anticipated.
The project requires constructing a railway, associated infrastructure and both mine and port facilities before the end of 2024. It could also create an estimated 45,000 jobs.
Rio, the Simfer joint venture, WCS and Republic of Guinea earlier agreed to jointly build a 670km long railway line between the mine and domestic ports.
The decision was reached despite the longer, cross-country route costing significantly more. 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.
First production is expected in 2025, ramping up over 30 months to an annualised capacity of 60 Mtpa with up to 120 Mtpa exported.
“We are continuing to work closely with the Government of Guinea, Chinalco, Baowu and WCS towards full sanction of this world class project by all partners,” Rio executive committee lead for Guinea and copper CEO Bold Baatar said in a public statement.
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