South China Morning Post (April 3) disclosed that in 2019, a China-backed consortium – SMB-Winning – won a US$15 billion contract to develop blocks 1 and 2 of the high-grade iron ore reserves in the Simandou mountains, a 110km (68-mile) range deep in the interior of southeastern Guinea. The government of Guinea has insisted that mining companies will have to build infrastructure to accompany the extraction of the ore namely, the trans-Guinea railway and a deepwater port in Conakry. Bidding for the project opened after Israeli billionaire Beny Steinmetz ended a seven-year dispute with Guinea’s government by relinquishing his claims on half of the mine. Anglo-Australian mining giant Rio Tinto owns a shade over 45 per cent of blocks 3 and 4, while Chinese firm Chinalco holds just under 40 per cent and the Guinean government owns the rest. The project is expected to be completed in 2025. The SMB-Winning consortium, which wants to ship iron ore from Guinea within five years, comprises Singaporean maritime firm Winning Shipping, Guinean-French logistics company UMS, Chinese aluminium producer Shandong Weiqiao and the Guinean government. The South China Morning Post said the Baowu Group, China’s biggest steel producer, is also planning to invest in the mine. Last year, Conakry approved a plan by the SMB-Winning consortium to build a 650km railway and deepwater port to enable shipments of iron ore. In its latest five-year plan for the steel sector, China said its goal was to source about 20 per cent of its iron ore from its companies overseas.  Besides Guines, the New Tonkolili iron ore project in Sierra Leone, which is invested and operated by Chinese firm Kingho Investment Co, went into full-scale operation last month. Chinese mining companies are already operating in Liberia, and recently a consortium of three Chinese companies – Metallurgical Corporation of China, China International Water and Electric Corporation and Hunan Heyday Solar Corporation – signed a memorandum of understanding with Algerian National Iron and Steel Company to mine Gara Djebilet iron ore in western Algeria.

(Comment: The Simandou site has an annual production capacity of 200 million tonnes if all four blocks were operated concurrently, while Western Australia produces more than 800 million tonnes per year.)