Guinea seeks developers for Simandou Iron Ore deposit


Guinea has inaugurated an international tender for blocks 1 and 2 of Simandou, giving companies until Aug. 2 to outline their bids as the country seeks to revive interest in the world’s largest undeveloped iron ore deposit.

Mines Minister Abdoulaye Magassouba told Reuters that the international tender would be “open, competitive and transparent’’.

“The deadline for companies to express interest was Aug. 2 and the process should be completed 30 days after that,’’ an official close to the tender said.

Guinea’s aspirations to develop Simandou have foundered because of the cost of infrastructure and protracted legal disputes, but strong iron ore prices and the resolution of some of the problems have increased the chances that developers can be found.

Government sources speaking on condition of anonymity, said western mining groups and companies from Asia, including China, had shown interest in Simandou, which had a very high grade.

High grade iron ore commands a premium and has become sought after by countries, including China, because processing it creates less pollution than lower grade ore.

Blocks 1 and 2 have become available following the resolution of one of the legal cases that have embroiled Simandou.

Billionaire Beny Steinmetz’s BSG Resources (BSGR) said it would walk away from the Simandou project, but retains the right to mine the smaller Zogota deposit.

The Guinean government had said ore mined from Simandou must be shipped from its own ports, presenting a challenge for prospective developers as its location is 650 kilometres from Guinea’s coast.

Guinea has said ore from Zogota can be shipped using a Liberian route. Those involved in Zogota have said activity around the smaller, more manageable project could help to release the deadlock around Simandou.

One industry source said Australian iron ore company Fortescue Metals was interested in the Simandou tender.

Fortescue Metals, however, did not comment. (Reuters/NAN)

JULY 23, 2019 14:42 GMT|

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