Rio Tinto will invest $6.2 billion in the development of an iron ore deposit in Guinea

The Simandou iron ore project is the world's largest untapped raw material deposit with resources of 2.8 billion tons

The British-Australian mining concern Rio Tinto plans to invest $6.2 billion in the Simandou iron ore project in southeastern Guinea over the next three years. This is stated in the company’s press release.

Simandou is the world’s largest high-grade iron ore deposit. As of December 31, 2022, the total mineral reserves amounted to 2.8 billion tons, the processing of which will provide Rio Tinto with 1.5 billion tons of iron ore.

The mine’s life is estimated at 26 years, and the average iron content in iron ore is 65.3%.

According to the company’s estimates, $6.2 billion is only the initial investment in the project, including the development of the mine and railway and port infrastructure.

«We are continuing to work closely with the Government of Guinea, Chinalco, Baowu and WCS towards full sanction of this world class project by all partners. Simandou will deliver a significant new source of high-grade iron ore that will strengthen Rio Tinto’s portfolio for the decarbonisation of the steel industry, along with trans-Guinean rail and port infrastructure that can make a significant contribution to the country’s economic development,» said the head of Rio Tinto’s Guinea executive committee.

As part of this project, Guinea, Simfer and WCS will jointly build more than 600 km of new railways and port infrastructure. This will facilitate the export of up to 120 million tons of iron ore.

Production at Simandou is scheduled to start in 2025. Within 30 months, the mine’s capacity will reach 60 million tons of ore per year.

The project is being implemented by a consortium of CIOH, WCS, Rio Tinto, Baowu and the Republic of Guinea. Rio Tinto owns 45.05% of the project.

As GMK Center reported earlier, Rio Tinto in the third quarter of 2023 increased shipment of iron ore from the Pilbara region (Western Australia) by 1% compared to the same period in 2022 – up to 83.9 million tons. The production of iron ore in the region during this period fell by 1% y/y – to 83.5 million tons.

Rio Tinto waiting to ship 323-338 million tonnes of iron ore from its mines in the Pilbara region in 2024, but will produce more low iron ore. The company warned that the level of sales of its low-grade products (SP10) in the current year will reach 45-50 million tons, or 13-15% of the total volume of ore sales in Western Australia.