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Simandou iron deposit: Guinea is betting on co-development


Efinally. Two weeks after suspending the Simandou iron ore mining project in southeastern Guinea, the transitional military authorities, led by Colonel Mamadi Doumbouya, have just signed a framework agreement for 15 billion dollars with the mining companies Winning Consortium and Rio Tinto Simfer, which will allow the resumption of the site.

Simandou is one of the largest iron deposits in the world, but also a sea serpent. Its exploitation has been hampered for years by disputes over mining rights, suspicions of corruption and the scale of the investments to be made in a landlocked region. and a country sorely lacking in infrastructure. The soldiers who came to power by force in 2021 had hastened to reassure the foreign partners by assuring that the agreements made would be respected.

But Guinea now wants to have a say in the development of this huge project and in the long term to make its voice heard on the price of iron or bauxite on the markets, said the head of government Mohamed Béavogui. “It’s not a renegotiation, it’s just a reorganization of the way of working,” he stressed. “Guinea does not want to review contracts or conventions, Guinea wants a real co-development of this project. »

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Tripartite agreement

The formalization of the signing of this agreement was made on Guinean public television RTG. The tripartite agreement, signed Friday evening, for a period of 35 years provides for co-development between Rio Tinto with its subsidiary Simfer (block 3 and 4) and Winning Consortium (block 1 and 2). The Anglo-Australian Rio Tinto is allied with Chinalco in a joint venture for the exploitation of the deposit and the Singaporean Winning Shipping with the Chinese aluminum producer Shandong Weiqiao, the Yantaï Port group and the Guinean company United Mining Supply.

The contract concerns “infrastructure, mining development, the port”, according to Fadi Wazni, head of Winning Consortium, speaking to RTG. It provides for the construction of a railway of about 670 km to connect the mining corridor to an ore port on the Guinean coast south of Conakry.

The railway and deep-water port are expected to be completed in December 2024, under the terms of the agreement announced to RTG. And the first commercial production should see the light of day no later than March 31, 2025.

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Chronic corruption

Exploitation has been hampered for years by disputes over mining rights, suspicions of corruption and the scale of the investments to be made in a landlocked region and a country cruelly lacking in infrastructure. On March 10, the head of the Guinean junta Mamady Doumbouya had ordered the cessation of all activity on the Simandou site, to demand that the interests of Guinea be “preserved” by the operators.

Guinean Minister of Mines and Geology Moussa Magassouba told RTG that the Guinean state had “negotiated” with the mining companies. “Before, we had 0%, so zero francs. We negotiated and we managed to get 15% of the rails, the port, the mines,” he said. The entire project represents several thousand direct jobs.

According to experts, Guinea could have the world’s largest untapped reserves of high-grade iron, among other considerable natural and mineral resources (bauxite, gold, diamonds, hydrological capital), but these do not prevent the country to be very poor. However, Simandou is also afflicted by the corruption deemed chronic in Guinea. Colonel Doumbouya, who was sworn in as President on 1er October, has made the fight against corruption one of its major battles. “We are the leading bauxite producers in the world today, so the price of bauxite goes through Guinea and we must have a say and there must be benefits for our populations”, hammered the head of government. . “Tomorrow, the price of iron will be calculated from Guinea, we must ensure that Guinea wins there,” he insisted.

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