The Government of Guinea, Rio Tinto, Chinalco and the IFC have signed the investment framework for blocks 3 and 4 of the Simandou iron ore project. This investment framework means a great significant milestone for these countries. It also provides the legal and commercial foundation for the project.
Within the coming days, the Government of Guinea will submit the framework for the consideration of the Guinean National Assembly in order to seek its ratification. Once ratified the project partners will finalise, within approximately one year from ratification, the bankable feasibility study which will confirm all the project parameters including cost and timeline.
In parallel, the parties, under the leadership of Rio Tinto, are working together to assemble a consortium of investors who will finance, build and own the multi-user 650km railway and deep-water port infrastructure within the agreed timeframe and along procedures laid down by the bankable feasibility study and involving all parties.
When fully operational, the project has the potential to double the country’s current GDP. The project will create significant employment and, at full capacity, will stimulate an estimated 45,000 jobs throughout the economy. It will also induce subcontracting and procurement activities. New and upgraded roads and the development of fibre and wireless communications will underpin indirect economic development for communities along the Southern Growth Corridor infrastructure route.
State minister of mines and geology of the Republic of Guinea, Kerfalla Yansané, said: Simandou is one of the largest and best quality iron ore deposits in the world. It has the potential to provide the global market with highly competitive ore for more than 40years. This estimated US$20 billion project, aiming to develop blocks 3 and 4 of Simandou along with the infrastructure, will boost Guinea’s whole economy and spur our Southern Growth Corridor through mining, agriculture, forestry, livestock and trade.
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