Guinea's GDP Doubles, the World's Largest Mining Project - Simandou in Guinea Starts Production

The world's largest mining project - the Simandou project in Guinea officially started production on November 11. The project cost 2.3 billion USD and took nearly 30 years from discovery to production, which is a historic milestone for the mining industry.

The mine is operated by Rio Tinto Group (NYSE: RIO), the Simandou Consortium, China Baowu Mining, China Aluminum, and the Guinean government.

Project Scope and Impact on the Global Iron Ore Market

Once fully operational, the Simandou iron ore mine is expected to produce up to 120 million tons of iron ore annually, accounting for about 7% of global seaborne iron ore trade. The average iron content of the ore from this mine is approximately 65%, placing its output among the highest grade globally.

Rio Tinto CEO Simon Trott said, "This outstanding achievement would not have been possible without the hard work of our thousands of colleagues. We are developing a high-quality new iron ore resource that meets the needs of low-carbon steel production customers, further enriching our world-class iron ore resources portfolio in Pilbara and Canada."

Challenging Australia's Dominance in Iron Ore

This project has been humorously called the "Pilbara Killer," which could challenge Australia's dominant position in the global iron ore market. The project includes a 600-kilometer-long cross-Guinea railway connecting the mine to the newly built deep-water port of Moribay in the Atlantic coast. A joint venture named Compagnie du TransGuinéen will be responsible for the transportation corridor, supporting mining operations and broader economic activities.

The Simandou Project Will Double Guinea's GDP

For Guinea, which has a population of about 15 million, the Simandou project represents a national transformation. The government expects that by 2040, the project will double Guinea's GDP and drive over 200 billion USD in investments in infrastructure, education, and energy sectors.

"Simandou is not just a mining project; it is a driver of national transformation," said Gibril Diakite, Chairman of the Simandou 2040 Strategic Committee. "This collective success reflects the vision of the head of state and the determination of the people of the country to build a shared prosperous future," he added.

President Mamady Doumbouya, who came to power in 2021, has bet his political legacy on the completion of this mine, considering it the core of the country's "Simandou 2040" plan.

China and Green Transition Win-Win

Initially, Rio Tinto Group held 100% of the shares in this project. However, economic and political realities have reduced its share to 25%, making China the biggest beneficiary now.

With China Baowu and China Aluminum as the two major investors, Beijing now ensures direct supply of high-quality iron ore. By reducing reliance on Australia and Brazil, China will also gain influence over global pricing.

Increased control may eventually push prices below $80 per ton. This situation benefits steel producers, but not those seeking to recover significant mine development costs.

Nevertheless, the mine's exceptional grade makes it a cornerstone of the global green steel transition. Its high purity enables more energy-efficient and lower-emission production, aligning with global decarbonization goals.

Source: benzinga

Original: www.toutiao.com/article/1848637355390983/

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