Name of the Project
Simandou iron-ore project.
Location
Guinea.
Client
Simfer is a joint venture owned by the government of Guinea (7.5%), Rio Tinto (46%), Chalco Iron Ore Holdings – a consortium of Chinese state-owned firms led by the Aluminium Corporation of China (41.3%) – and the International Finance Corporation, or IFC, (4.6%).
Project Description
The Simandou project comprises three core elements – a mine, a railway and a port, as well as associated infrastructure.
There will be an openpit iron-ore operation in the Simandou range, in south-eastern Guinea, with an expected peak production of between 95-million and 100-million tonnes a year.
The railway will be about 650 km long to transport the iron-ore from the mine to the Guinean coast.
The port will be located south of Conakry, in the Morebaya river.
Associated developments to provide utilities and supporting infrastructure for the project include construction facilities, access to materials, power generation, water, access roads and accommodation.
Construction of the project will be undertaken in two stages.
The first stage will develop the southern Ouelaba mine site, which will include the construction of the railway and port to a capacity of about 50-million tonnes a year.
The second stage will bring the northern Pic de Fon mine site on line and expand the capacity of rail and port facilities, increasing production to between 95-million and 100-million tonnes a year.
The mine will be the largest integrated mine-and-infrastructure project ever developed in Africa.
Jobs to be Created
Not stated.
Net Present Value/Internal Rate of Return
Not stated.
Value
A Rio Tinto engineering study conducted on the project estimates capital expenditure at $18.3-billion.
Duration
The first shipment of ore was initially expected by 2015; however, this has been postponed to 2018.
Latest Developments
Rio Tinto has said that the IFC is selling its 4.6% stake in the project.
The exit of IFC, an arm of the World Bank, is the latest setback for the project to develop the world's biggest untapped iron-ore reserves. In July, Rio Tinto's new CE Jean-Sebastien Jacques indicated that the project had been shelved temporarily due to a sustained slump in prices.
"We confirm that the IFC has exercised a put option, which it has held since 2006, to require Rio Tinto and Chinalco to buy their stake in Simfer," Rio Tinto has said in an emailed statement, referring to the joint venture.
A senior official at Guinea's mines ministry has said he is not aware of the decision.
Key Contracts and Suppliers
Fluor (construction contractor) and NRW Holdings (earthworks contract).
On Budget and on Time?
Too early to state.
Contact Details for Project Information
Chinalco, tel +86 10 8229 8103, fax +86 10 8229 8081 or email info@chinalco.com.cn.
Rio Tinto, Mark Shannon, tel +44 20 7781 1178, fax +44 20 7781 1832 or email mark.shannon@riotinto.com.
Fluor, tel +1 469 398 7000 or fax +1 469 398 7255.
NRW Holdings, tel + 61 8 9358 5510 or fax +61 8 9358 5515.