Rio Tinto and Winning Consortium Simandou (WCS) have got their ducks in a row, formalising a joint venture (JV) to advance the Simandou iron ore project in Guinea.
Established in partnership with the Guinea Government, the La Compagnie du TransGuinéen (The TransGuinean Company) will progress plans to co-develop Simandou’s infrastructure, including the quintessential rail and port components.
The parties will now work on next steps such as the shareholder agreement, finalising cost estimates and funding, securing necessary approvals and other permits and agreements necessary in establishing Simandou’s infrastructure.
Once developed, the rail infrastructure will extend more than 600km and connect Simandou with a new deepwater port in the Forécariah prefecture in Maritime Guinea, presenting a significant economic opportunity for the West African nation.
“The incorporation of La Compagnie du TransGuinéen with our partners underscores the importance of the Simandou resource in today’s decarbonising world, and its development will complement Rio Tinto’s strong iron ore portfolio,” Rio Tinto executive committee member in charge of the Simandou project Bold Baatar said.
“It is also a very important moment for Guinea and for Guineans, for whom the project’s southern infrastructure corridor has the potential to bring significant benefits for regional economic development by leveraging international project and ESG (environmental, social and governance) standards.”
In early July, Rio Tinto and WCS missed a 14-day deadline to form a joint venture and were ordered to “immediately stop all activities” at Simandou.
Guinea’s Mines Minister Moussa Magassouba called for the suspension, suggesting the two companies’ inactivity was detrimental to the project and its stakeholders.
Rio Tinto was first granted a Simandou exploration licence in 1986. Since then, the project’s development has been plagued with obstacles, with political complexities, cost concerns and mining rights disputes getting in its way.
Once up and running, the project would be the largest iron ore project of its kind in the world, with the potential to produce more than 100 million tonnes of iron ore a year.
The shareholding of La Compagnie du TransGuinéen will be split between Simfer Jersey, a joint venture between Rio Tinto (53 per cent) and Chalco Iron Ore Holdings (47 per cent), and WCS, a consortium of various companies.
Rio Tinto and WCS will each receive a 42.5 per cent equity share in La Compagnie du TransGuinéen with the Guinea Government owning a 15 per cent free carry equity stake.