A colossal investment! Fifteen billion dollars, the equivalent of Guinea’s GDP, will be invested to exploit the iron deposit of Simandou, in the south-east of Guinea. A better negotiated contract than the previous ones according to the ruling junta. Simandou has also, for decades, been afflicted by corruption deemed chronic in Guinea. Colonel Doumbouya, who was sworn in as president on October 1, 2021, after having chased away his predecessor Alpha Condé, has made the fight against corruption one of his great battles.
For this unprecedented project located on the Simandou site, the Guinean State signed, on the evening of March 25, 2022, a framework agreement for a period of thirty-five years with the Singaporean multinational Winning Consortium and the Anglo -Australian Rio Tinto Simfer. Simandou is considered one of the largest iron deposits in the world. It is also one of the most coveted, especially since the prices of iron and aluminum are currently soaring.
The exploitation of the Simandou site 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, 2022, the head of the Guinean junta Mamady Doumbouya had ordered the cessation of all activity on the site to demand that the interests of Guinea be respected. “preserved” by operators.
While African governments often negotiate bad contracts, the Guinean Minister of Mines and Geology, Moussa Magassouba, told RTG that the Guinean state had taken the time to “to negotiate)” with mining companies.
“Before we had 0% so 0 francs. We negotiated and we managed to get 15% of the rails, the port, the mines”
Moussa Magassouba, Guinean Minister of Mines and GeologyGuinean Radio Television (RTG)
The contract concerns “infrastructure, mining development (and) the harbour”, also explained Fadi Wazni, head of Winning Consortium, on the antennas of Guinean Radio Television (RTG). This contract provides for the construction of the Transguinéen, a railway of about 670 km to connect the mining corridor to an ore port on the Guinean coast, south of Conakry, the capital. The railroad and deepwater port are expected to be completed in December 2024, under the terms of the agreement, and first commercial production is expected no later than March 31, 2025.
To carry out this enormous investment, Rio Tinto joined forces with Chinalco and the Singaporean Winning Shipping with the Chinese companies Shandong Weiqiao (aluminum producer) and Yantaï Port, as well as the Guinean company United Mining Supply.
According to experts, Guinea could have the world’s largest untapped reserves of high-grade iron, among other considerable natural and mining resources (bauxite, gold and diamonds). But that does not prevent the country from being very poor. The entire project represents several thousand direct jobs.