Fortescue in race for massive iron ore project in Guinea

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AUSTRALIA’S Fortescue Metals Group has submitted a bid to be the developer of Blocks 1 and 2 of the giant Simandou iron ore project in Guinea, West Africa.

The Simandou project is one of the world’s largest untapped high-grade iron ore sites, with more than two billion tonnes of resources.

Fortescue chief executive Elizabeth Gaines said, ‘Following the release of information at a public meeting held in Guinea last week, Fortescue confirms that it is participating in the tender for Simandou Blocks 1 and 2.’

The iron ore project potentially has a mine life in excess of 40 years and could make Guinea one of the world’s top iron ore exporters.

‘Consistent with our active business development programme, Fortescue is interested in global opportunities in iron ore and other commodities which align with our strategy and expertise,’ Gaines said.

Fortescue is joined by Guinea’s biggest bauxite exporter, SMB-Winning, as the final two companies in the running for the rights to develop the two blocks, according to Reuters.

Guinea has struggled to develop the Simandou deposit as the site has been involved in legal and political disputes for more than a decade.

Another issue is the high cost of infrastructure to transport the ore out of the remote south-eastern corner of Guinea.

The Guinean government requires that iron ore mined must be exported through Guinea, requiring a 650-kilometre railway to Guinea’s coast as well as a deep-water port. The cost of developing the deposit is estimated at $23bn.

Simandou Blocks 3 and 4 are owned by a joint venture of Rio Tinto, China Aluminium Corp (Chinalco) and the Guinean Government.

Rio Tinto holds a 45 per cent stake in blocks three and four of Simandou, while Chinese state-controlled Chinalco and the Guinean Government own 40 per cent and 15 per cent, respectively.

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