Deep within the interior of Guinea lies the world’s largest and richest (65% pure) deposit of iron ore, located at Simandou. Since its discovery in the 1990s, the question has always been: “How to get it out?” Guinean authorities are determined that their ore be transported on their railroad, and exported from their port (even though neither one exists, and export through Liberia would be shorter/cheaper).
Authorities have divided the Simandou deposit into four “blocks,” and fierce battles — involving global oligarchs like George Soros and Beny Steinmetz (of the Israeli DeBeers diamond fortune), who fought a years-long court battle for blocks 1 and 2 — have taken place for possession of the treasure trove. In 2016, Rio Tinto wrote off an over-$2 billion investment after an investigation by the British Serious Fraud Office. After the Soros/Steinmetz battle (still not completely resolved), Guinea sought to make any future concession conditional on the building of, not just a 650km railway, but also a deep-water port, potentially Africa’s largest infrastructure investment, to sort out the serious contenders.
Enter the Chinese. In June 2020, Reuters reported that the Guinean government had granted rights to blocks 1 and 2 to a consortium which includes France’s Société Minière de Boké (SMB, a “transportation and logistics” company), Singapore’s Winning Shipping, and Chinese Shandong Weiqiao (an aluminum producer, part of China Hongqiao), along with a Guinean government company.
On Thursday, Oct. 12, mining trade publications were reporting that the Guinean government had approved the $16 billion deal, which includes the construction of both the railway and port in Guinea in order to export the raw materials. “We finally have hope of realizing this old dream for the country,” Mines Minister Abdoulaye Magassouba told Reuters.
While the details are not completely spelled out, the evidence shows that it was the involvement of China — led by mammoth steel producer Bau Steel — which made the difference. A cornerstone for the port was laid in October, with full production expected by 2025. http://www.smb-guinee.com/en/consortium-smb-winning/
