Guinea signs investment deal to develop iron ore project

iron ore Michael Theis  flickrThe government of Guinea has signed an investment agreement for US$20bn to develop the Simandou iron ore project

According to Reuters, Yansane Kerfalla, mining minister, said that Guinea was on track to conclude negotiations with its partners — Anglo-Australian mining company Rio Tinto, International Finance Corporation and China’s Chinalco, on the Simandou project.

Simandou is the largest untapped iron ore deposit in West Africa and the project is touted to be an ambitious one in the West African country.

The project would comprise the construction of a deepwater port, fibre optic and wireless communications, and 1,000km of new roads and railway lines to carry the ore from the Simandou mountain range.

Sam Walsh, chief executive of Rio Tinto, said, ”The Simandou iron ore project, which could create Africa’s biggest ever infrastructure venture, would boost Guinea’s annual revenue by US$1.2bn through income tax and royalty payments, and pump billions more into the nation’s economy.”

The deposit would also contribute about US$7.6bn to the Guinean economy — 22 times the US$340mn received in international aid by the West African country in 2012, added Walsh. Production is expected to begin by the end of 2020, added reports.

According to statistics by Rio Tinto, Simandou has 2.25bn tonnes of iron ore resources and the company has been given control of all four tenements.

In April 2011, Rio Tinto and the government of Guinea signed a settlement agreement that secured Rio Tinto’s mining title in Guinea and provides the government the right to take a stake of up to 35 per cent in Simfer SA, according to the company website.

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