Mining: Simandou’s project soon on track?

China is about to grant some of its biggest state-owned companies permission to start developing the northern Simandou area in Guinea, one of the world’s largest untapped iron ore deposits, sources close to the dossier said Thursday. The Middle Kingdom, anxious to ensure a supply of better quality iron ore and to expand its footprint in West Africa, wants to participate actively in the development of the project. Indeed, the Simandou deposit is not only massive – two billion tons of iron ore – but the quality of the expected production will have one of the highest grades in the industry (65% to 66% iron, above industry benchmarks of 62% iron, according to official documents). The decision is expected to be formalised soon, as the China State-owned Asset Supervision and Administration Commission (SASAC) is currently in discussions with state-owned enterprises for the construction of expensive port and railway infrastructure. Lenders currently cited include the China Development Bank and the Asian Investment Bank for infrastructure. As a reminder, Simandou is 45% owned by the Anglo-Australian mining group Rio Tinto, 40% by Chinalco, and 15% by the Guinean government.