SMB-Winning beats Fortescue to Simandou project
The SMB-Winning consortium, which comprises Chinese aluminium producer Shandong Weiqiao, China's Yantai Port Group, transport and logistics company UMS International, and Singapore's Winning Shipping, has pipped Australian iron ore producer Fortescue Metals to secure the rights to develop blocks 1 and 2 of the Simandou iron ore deposits in Guinea.
The deposits, estimated to contain 2bn t of iron ore, are cut into four blocks and thought to be one of the world's largest undeveloped iron ore resources.
Development of blocks 1 and 2 will require SMB-Winning to construct a 650km railway across Guinea and a deepwater port on the country's coast for the export of ore from its 60-80mn t/yr Simandou project. But the costs would come in considerably higher than a shorter alternative route via Liberia.
The Chinese-led consortium is Guinea's largest producer of bauxite.
In 2014, the Guinean government stripped BSGR, a joint venture company between Brazilian mining firm Vale and Guernsey-based BSG Resources, of its mining licence for the blocks, citing alleged corruption. The following year, Vale transferred its 51pc equity stake in the joint company to BSG Resources.
UK-Australian mining company Rio Tinto has held blocks 3 and 4 at Simandou for many years, but been unable to make the development stack up and took a $1.8bn write-down on the project in 2015. A non-binding agreement that Rio Tinto would sell its entire Simandou stake to Chinese state-controlled metals group Chinalco lapsed in October, two years after it was initially signed.
source: Argus Media
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