Baosteel seeks to hasten the iron ore mining project at Simandou in Guinea, according to local media. China’s aluminium major Chinalco has a stake in Simandou mine. China is also part of a Franco, Chinese and Singaporean consortium that has received approval from Guinea’s government for the development of the Simandou iron ore project.
Simandou project has a massive 2bn mt of high-grade iron ore reserve. Simandou is divided into four blocks, with blocks 1 and 2 is controlled by the SMB-Winning consortium, comprising Singapore-based Winning Shipping, China’s aluminium producer Shandong Weiqiao, the Yantai Port group and the Guinea’s logistics company United Mining Supply. The blocks 3 and 4 are owned by Rio Tinto Plc and Chalco. The project has been long-delayed due to disputes over mining rights.
Baosteel estimates that Simandou project would require infrastructure investments of over $15bn for building railroad connectivity and a deep-water port for exporting iron ore.
China Iron & Steel Association (CISA) and the State-owned Assets Supervision and Administration Commission (SASAC) are keen on reducing the country’s iron ore imports for steel making. The recent trade skirmish with Australia and iron ore supply disruption in Brazil could expedite China’s investments in the West African iron ore deposits. China wants Simandou to start production by 2025.