Name of the Project
Simandou iron-ore project.

Location
Guinea.

Client
Simfer is a joint venture owned by the government of Guinea (7.%), Rio Tinto (46.%), Chalco Iron Ore Holdings – a consortium of Chinese state-owned firms led by the Aluminium Corporation of China (41.%) – and the International Finance Corporation (4.6%percent).

Project Description
The Simandou project comprises three core elements – a mine, a railway and a port, as well as associated infrastructure.

There will be an openpit iron-ore operation in the Simandou range, in south-eastern Guinea, with an expected peak production of between 95-million and 100-million tonnes a year.

The railway will be about 650 km long to transport the iron-ore from the mine to the Guinean coast.

The port will be located south of Conakry, in the Morebaya river.

Associated developments to provide utilities and supporting infrastructure for the project include construction facilities, access to materials, power generation, water, access roads and accommodation.

Construction of the project will be undertaken in two stages.

The first stage will develop the southern Ouelaba mine site, which will include the construction of the railway and port to a capacity of about 50-million tonnes a year.

The second stage will bring the northern Pic de Fon mine site on line and expand the capacity of rail and port facilities, increasing production to between 95-million and 100-million tonnes a year.

The mine will be the largest integrated mine-and-infrastructure project ever developed in Africa.

Jobs to be Created
Not stated.

Net Present Value/Internal Rate of Return
Not stated.

Value
A Rio Tinto engineering study conducted on the project estimates capital expenditure at $18.3-billion.

Duration
The first shipment of ore was initially expected by 2015; however, this has been postponed to 2018.

Latest Developments
Guinea’s mineral management company has said that Rio Tinto Group has overstated the Ebola virus’s effect on developing the world’s biggest iron-ore deposit and has delayed its plans for the mine to focus on operations in Australia amid a rout in prices for the steelmaking material.

“The real causes of the delay aren’t so much Ebola as they are the ramblings of the technical team in London,” Societe Guineenne du Patrimoine Minier has said in its 2015 annual report.

“Simfer overstated the effect of Ebola, unlike other mining companies that were able to better manage the epidemic” it has said.

Rio has declined to comment. In a February 2015 statement, Rio reaffirmed its support to Guinea following the Ebola outbreak and said it was making good progress on Simandou.

Guinea was among three West African countries hardest hit by the worst outbreak of Ebola yet, with more than 11 000 people dying since the first victim was identified in the region in 2013.

Earlier this month, Rio CEO Jean-Sebastien Jacques said there was no progress for now on finding infrastructure financing for the massive Simandou iron-ore project, even after more than 200 meetings with possible backers.

Jacques, who took office at the start of July this year, said the deposit was undoubtedly world class and Rio had been working to lower project costs through, for instance, a voluntary redundancy scheme.

"We have been discussing with many parties including the Chinese on how we could finance the infrastructure . . . today there is no secure pathway in relation to the financing," he told reporters in London.

"It doesn't mean that we won't have it in three months or six months or one year or two years."

In May, Rio Tinto submitted feasibility studies to the Guinea government for the Simandou project.

Key Contracts and Suppliers
Fluor (construction contractor) and NRW Holdings (earthworks contract).

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Chinalco, tel +86 10 8229 8103, fax +86 10 8229 8081 or email info@chinalco.com.cn.
Rio Tinto, Mark Shannon, tel +44 20 7781 1178, fax +44 20 7781 1832 or email mark.shannon@riotinto.com.
Fluor, tel +1 469 398 7000 or fax +1 469 398 7255.
NRW Holdings, tel + 61 8 9358 5510 or fax +61 8 9358 5515.