A resources giant gave its blessing for a Pilbara ‘killer’ mine.
Rio Tinto’s board of directors recently gave the green light for the $26 billion Simandou mine, 526km southeast of Conakry.
Rio has already inspected the site for a proposed 60 million tonnes per annum (Mtpa) mine, rail and port infrastructure project. The proponent is investing US$6.2 billion (A$9.4B) in the mine while Guinean Government-funded Simfer entity will spend a further US$5.4B (A$8.2B).
“Early November I was out there. I flew over the rail line, the mines and the port in a helicopter – it is amazing what has happened,” CEO Jakob Stausholm said according to the Financial Times.
“The board yesterday sanctioned the biggest mining project in the world … [and] I am very pleased that we as Rio Tinto can now, in a more unconstrained way, grab the opportunities in this world.”
The project involves constructing a railway, associated infrastructure and both mine and port facilities before the end of 2024. Production could start as soon as 2025, creating an estimated 45,000 jobs.
Total initial capital expenditure has already reached 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
- US$4.6B (A$6.9B) 536km heavy haul rail mainline and 16km Winning Consortium Simandou (WCS) rail spur.
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.
Other project partners include Chalco Iron Ore Holdings and Baowu. These state-controlled entities are still waiting for final investment approval from the Chinese Communist Party.
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