Rio Tinto’s Australian iron ore assets are well known, but for years the company has been working on an international project that could redefine the iron ore landscape.
The Simandou project in the African country of Guinea is considered the largest iron ore deposit of its kind.
However it’s struggled to get out of first gear, with political complexities, cost concerns and mining rights disputes getting in its way.
Rio Tinto owns 45 per cent of Simandou’s southern half, Blocks 3 and 4, with the Guinean government holding 15 per cent and Aluminium Corporation of China the remaining 40 per cent.
After suspending all Simandou activities in early March, Guinea’s ruling junta gave Rio Tinto and Winning Consortium Simandou (who is developing Blocks 1 and 2) the green light to resume activities in late March.
The decision didn’t come without its warnings though, with Guinea Mines Minister Moussa Magassouba emphasising a strict development timeline for the project, with infrastructure projects needing to be completed by December 2024.
Following that, he said production must start by March 31, 2025.
Once developed, Rio Tinto’s share in Simandou has the potential to produce more than 100 million tonnes of iron ore a year.
To put that into perspective, Rio Tinto shipped 321.6 million tonnes of iron ore in 2021, derived from 16 mines in the Pilbara region of Western Australia.
With China’s long-term strategy to diversify its iron ore suppliers, and with Simandou recognised for its high-grade product, the project could create complications for Australian iron ore miners.
Yet, while Simandou has Guinea’s approval for now, along with the Rio Tinto board (announced at the company’s 2022 annual general meeting), history suggests there’s still a road ahead before Simandou can reach production and become a bonafide iron ore player.