SMB-Winning obtains the final green light for the operation of the Simandou project

Discovered in the 1990s, the Mount Simandou iron deposit could finally be developed in the near future. On June 4, the Guinean government endorsed the basic agreement for the exploitation of Blocks 1 and 2 of Mount Simandou by the Guinean-Chinese consortium Société minière de Boké (SMB-Winning).
Stake : To launch the exploitation of the Mount Simandou mining site, the largest unexploited iron deposit on the planet.

The 25-year agreement is expected to be formally signed in the first days of the week of June 8. Project of all superlatives – iron ore reserves are estimated at five billion tonnes, of excellent quality (65% to 66% iron, above the industry benchmark [62%], according to official documents) and likely to supply 7% of world demand for a quarter of a century – the Mount Simandou mine site has never taken off, which is the victim of both a highly cyclical environment and lengthy negotiations between the Guinean authorities and the Rio Tinto and Chinalco groups – still joint owners of Blocks 3 and 4 of Simandou – as well as with Vale and BSGR, the former joint owners of Blocks 1 and 2. The latter two permits were finally re-allocated in November 2019 to the SMB-Winning consortium, previously known to operate the first bauxite mining project in the Boké region.

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Commenting on the validation of this agreement, the Guinean Minister of Mines, Abdoulaye Magassouba, for his part recalled that the agreement was on the whole « in conformity with the provisions of the Guinean mining code, with the exception of a few derogations granted to the investor ». The political leader also stressed the integrated nature of the project, which includes both a mining and an infrastructure component, which will take the form of the construction of the much-anticipated Transguinean – a railroad of more than 650 kilometers that will bring iron ore through Guinean territory to a deep-water port in Matakang, in the Forécariah prefecture. A total of $14 billion in investment is expected to be committed, making it the largest mining venture ever carried out in Africa. As for the expected revenues, the Minister of Mines indicated that the assumptions used estimate the direct revenues received by the State over the duration of the agreement (25 years) at 15.5 billion dollars, to which will be added all the indirect economic spin-offs created by the project (jobs created, infrastructure put in place …). However, the Guinean government and the local population will still have to show patience, as the site is not expected to start operating until 2025.

Location of Mount Simandou in Guinea (red diamond). Credit: Wikimedia Commons