Name and Location
Simandou mega iron-ore project, Guinea.

Client
Rio Tinto and Chalco, a subsidiary of State-owned Aluminium Corporation of China, hold a 53% and 47% interest respectively in the joint venture (JV), which translates into a 50.35% and 44.65% interest in the project. The private-sector arm of the World Bank, the International Finance Corporation, holds the remaining 5%.

Guinea retains its options for participation in the project and is expected to take up its first share in the near future.

Project Description
The current plan for the Simandou iron-ore project envisages the construction of a mine, with a capacity of 95-million tons a year of high-grade iron-ore, a 650 km dedicated industrial railroad passing through 21 km of tunnels traversing Guinea to the coast, a rail-car dumping facility and a four-berth wharf, located 11 km offshore from Matakang. The mine will be the largest integrated mine-and-infrastructure project ever developed in Africa.

Value
It was estimated in 2011 that Simandou needed $9-billion in financing, but the estimated cost in a Rio Tinto engineering study conducted four months ago has now increased the project’s capital expenditure to $20-billion.

Duration
The first shipment of ore was initially expected by 2015; however, the Guinea government has reported that this deadline is unlikely to be met.

Latest Developments
Guinea's Minister of Mines Mohamed Lamine Fofana has said that the estimated 2015 first production date for the portion of the Simandou iron-ore deposit, held by Rio Tinto, will not be met.

"In 2011, the first date of production agreed with Rio was 2015. Today, the reality is this cannot be respected," Fofana has said.

The Guinea government and Rio Tinto are expected to meet between June 19 and June 22 to discuss the development of the massive iron-ore project, as costs for the project are escalating, to as much as $20 billion in a recent estimate.

The meeting may include a discussion on the timing and financing of the project.

"We're taking into account technical aspects to come to an acceptable chronogram for implementation of this project. Today we can't tell you when this will happen," Fofana says.

"We can't say for sure if it will be $16 billion, $17 billion or $20 billion, that's why it's taking so long," he adds.

Government is considering options for the estimated $20-billion Simandou project, including integrated infrastructure that could be shared by miners working north and south.

"We would like [the iron-ore] evacuated by the same infrastructure. It would reduce the cost . . . for just one mining company," Fofana says.

He says the government is open to exports through Liberia for the Nimba project, another iron-ore deposit close to the Liberian border, but not for Simandou.

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.