Collaborating with Chinese companies to jointly develop Simandou, the high-grade iron ore deposit in Guinea, Africa, represents a unique opportunity amid increasing demand for higher-grade, lower-impurity iron ore as steelmakers seek to reduce carbon emissions worldwide, said a company executive.
“Our partnership with Chinese companies on the Simandou project, which will become Africa’s largest integrated infrastructure and mining project once completed, is groundbreaking,” said Gerard Rheinberger, managing director of Simandou, Rio Tinto.
“Chinese partners’ diverse involvement in the project has been instrumental, not only as capital investors, but also as providers of high-quality equipment and expertise in infrastructure construction,” Rheinberger said.
“Such a partnership has created a collaborative environment for sharing knowledge, resources and experience. It allows us to leverage each other’s strengths and has fostered a strong foundation for the project’s success.”
He said the company is currently collaborating with Chinese partners including Aluminum Corp of China or Chinalco, and China Baowu Steel Group Corp to advance the project and develop the necessary infrastructure to facilitate the export of mined iron ore. It has also engaged Chinese suppliers and engineering, procurement and construction firms, such as China Harbour Engineering Co Ltd, which is providing critical equipment and services to support the construction.
In August, Rio Tinto SimFer, a joint venture between the government of the Republic of Guinea, Rio Tinto and Chalco Iron Ore Holdings — a Chinalco-led joint venture of leading Chinese SOEs including Baowu — awarded contracts valued at over $110 million to China’s Xuzhou Construction Machinery Group for the acquisition of heavy equipment parts, and associated maintenance services.
Simandou is home to the world’s largest and richest undeveloped high-grade iron ore deposit. Initial production from the SimFer mine is expected in 2025, ramping up over 30 months to an annualized capacity of 60 million metric tons per year, said Rio Tinto.
Rheinberger said the joint efforts with Chinese partners have not only propelled the development of the world’s largest greenfield integrated mine, but will also greatly bolster the lives of people in Guinea.
An analyst said that while Rio Tinto’s collaboration with China has historically been focused on supplying iron ore to Chinese steelmakers, there has been an increase in cooperation in third-country markets with Chinese partners.
While China has always been a key market for global mining giants in the iron ore sector, thanks to its vast market size, major players are keen to forge new partnerships with the country in projects overseas, as China advances new quality productive forces to support its high-quality development in an increasingly green-oriented world, said Zhao Xiangbin, chief strategist at Beijing Gold and Forex Fortune Investment Management.
“As China advances new quality productive forces to support its high-quality development, there is tremendous potential for further cooperation, particularly in the industry’s low-carbon transition,” Zhao said.
With the demand for higher-grade, lower-impurity iron ore, the essential feedstock in steel production keeps increasing, and Rio Tinto expects broader partnerships with Chinese players both at home and abroad.
“At the Simandou project, we are elevating our partnership with China to the next level. I believe our experience working with Chinese partners can be replicated in other operations,” Rheinberger said.
“A great example is observing the speed of execution of our Chinese EPC partners. I am impressed by the pace at which they can operate and scale up. For Rio Tinto, we have a long history of fruitful partnerships with China spanning over 50 years. In July this year, our total iron ore shipments to China reached 4 billion tons, continuing to support the country’s industrialization and urbanization.”
Rio Tinto is currently China’s largest iron ore supplier with around 250 million tons of shipments every year. It also provides key products such as copper, bauxite, alumina, borate, salt and other minerals to the country.