.
Guinea
15 Nov 2025 The first Simandou iron ore shipment to China and Australia’s strategic choices. Most extracts from US$20 billion mining project in Guinea’s Simandou – the world’s largest known untapped deposit of high-grade iron ore – are expected to be shipped to China, given the heavy investments by Chinese firms in the project. Guinea’s Simandou 2040 plan aims to use mining revenues to develop infrastructure, agriculture and education in the West African country, while also signalling the mine’s immediate global importance. Guinean officials are aware of the possibility that Chinese firms would use the massive influx of high-grade ore to suppress global iron ore prices. The officials have pledged to actively collaborate with the British-Australian mining giant Rio Tinto to leverage the mine’s premium product and Rio Tinto’s market expertise to maintain stable high prices for the ore. The Guinean minister of mines and geology, Sylla, who is a member of the Simandou Strategic Committee that monitors the project for the government, said the country was monitoring the formation of China Mineral Resources Group (CMRG), which aims to centralise Chinese iron ore imports to maintain a high iron ore price. As Rio Tinto is a pure miner, Guinea is often closer to Rio Tinto in the desire to maintain a high iron ore price, he added, referencing the diverse interests of the Chinese stakeholders, which also include processing and steelmaking. The project is expected to ramp up production over 30 months to reach its full commercial capacity of 120 million tonnes annually, a volume that will position Guinea among the top global iron ore exporters. Since China Baowu Steel Group was a major partner for Simandou, a lot of this ore will go to China. Rio Tinto and the Aluminium Corporation of China (Chinalco) own blocks 3 and 4 of Simandou under a consortium called Rio Tinto Simfer, while blocks 1 and 2 are owned by the Winning Consortium Simandou (WCS), whose key partners include Singapore’s Winning International Group, as well as China’s Weiqiao Aluminium and Baowu Resources. The Guinean government holds a 15 per cent stake in both, with an 18 million tonne share per year. To overcome delays caused by a lack of infrastructure, Simfer and WCS jointly funded and built the shared 650km railway and port of Morebaya infrastructure. Sylla was noting that Guinea’s interests sometimes aligned with Rio Tinto, sometimes with Baowu, and other times with WCS because WCS is a logistics specialist. Sylla also highlighted a complementarity between Simandou and Australian Pilbara ore. Simandou’s high-grade deposit targets the premium 65 per cent iron content blend market, making it comparable only to Brazil’s Vale, especially the Carajás deposits. He said this gave Rio Tinto the unique opportunity to offer both products and sell the premium ore not only to China but also to European and Middle Eastern steel mills. But the Simandou project is widely dubbed a potential Pilbara killer, a reference to its long-term threat to Western Australia’s market dominance. According to Sylla, this superior quality is critical to China’s “green steel” industry and gives Rio Tinto the unique opportunity to offer both products globally, as most of Australian Pilbara ore typically focuses on the larger 62 per cent blend market. Aitchison, general director of Rio Tinto Simfer, said that emerging steelmaking technologies required high-grade ore and Simandou’s quality allowed for reduced energy input in the process, thereby lowering carbon dioxide emissions. Beijing-based lawyer Kai noted that China’s shift from infrastructure to a hi-tech economy was reducing its demand for steel and iron ore. China produced 54 per cent of the world’s steel in 2023, this transition signals a long-term contraction for the global iron ore market. “With supply rising and demand falling, someone will inevitably be pushed out and that someone is likely to be the Pilbara region of Western Australia. The reason is geopolitical,” he said of Simandou’s entry. Xue argued that Australia’s Pilbara region was likely to be displaced due to Australia’s 2021 entry into the Aukus security pact with the United States and United Kingdom, focused on acquiring nuclear-powered submarines to boost its military standing in the Indo-Pacific. This move prompted China to diversify its supply chains, unblocking the long-stalled Simandou project in Guinea. Initiated by Rio Tinto in 1997, the project experienced many delays due to legal and political challenges before advancing with the partnerships involving Rio Tinto, Chinese firms and the Guinean government. Final construction started in 2022. The first shipment marks the moment Australia’s strategic choices began to undermine its own resource economy, Xue said. (Source: South China Morning Post)
by Nyabiage - a Kenyan journalist, the South China Morning Post's first Africa correspondent
.
