Rio Tinto provided an update at its Investor Seminar on the world-class Simandou iron ore project in Guinea, Africa, which is being progressed in partnership with CIOH, Winning Consortium Simandou (WCS), Baowu and the Republic of Guinea.

Simfer Jersey Limited is a joint venture between the Rio Tinto Group (53%) and Chalco Iron Ore Holdings Ltd (CIOH) (47%),a Chinalco-led joint venture of leading Chinese SOEs (Chinalco (75%), Baowu (20%), China Rail Construction Corporation (2.5%) and China Harbour Engineering Company (2.5%)). Simfer S.A. is the holder of the mining concession covering Simandou Blocks 3 & 4, and is owned by the Guinean State (15%) and Simfer Jersey Limited (85%). Simfer Infraco Guinée S.A.U. will deliver Simfer’s scope of the co-developed rail and port infrastructure, and is, on the date of this notice, a wholly-owned subsidiary of Simfer Jersey Limited, but will be co-owned by the Guinean State (15%) after closing of the co-development arrangements.

Simandou is the world’s largest untapped high-grade iron ore deposit. The Simfer joint venture’s mine concession held an estimated Total Mineral Resource as at 31 December 2022 of 2.8 billion tonnes, of which Rio Tinto is today reporting the conversion of an estimated 1.5 billion tonnes to Ore Reserves that support a mine life of 26 years, with an average grade of 65.3% iron and low impurities. Rio Tinto is also reporting Mineral Resources exclusive of Ore Reserves of 1.4 billion tonnes at 66.1% Fe and low impurities.

Rio Tinto estimates that its initial share of capital expenditure to develop the Simfer mine and the co-developed rail and port infrastructure project is approximately $6.2 billion.

We are continuing to work closely with the Government of Guinea, Chinalco, Baowu and WCS towards full sanction of this world class project by all partners. Simandou will deliver a significant new source of high-grade iron ore that will strengthen Rio Tinto’s portfolio for the decarbonisation of the steel industry, along with trans-Guinean rail and port infrastructure that can make a significant contribution to the country’s economic development.

—Rio Tinto Executive Committee lead for Guinea and Copper Chief Executive Bold Baatar

In what will be the largest greenfield integrated mine and infrastructure investment in Africa, more than 600 kilometers of new multi-use rail together with port facilities will be co-developed by the Republic of Guinea, Simfer and WCS. This will allow the export of up to 120 million tonnes per year of mined iron ore by Simfer and WCS from their respective Simandou mining concessions in the southeast of the country.

The co-developed infrastructure capacity and associated cost will be shared equally between Simfer, which will develop, own and operate a 60-million tonne per year mine in blocks 3 and 4 of the Simandou Project, and WCS, which is developing blocks 1 and 2.

Under the co-development arrangement, Simfer and WCS will deliver separate infrastructure scopes to leverage expertise. Simfer will construct the approximately 70 km Simfer spur rail line and a 60-million tonne per year transhipment vessel (TSV) port, while WCS will construct the dual track approximately 536 km main rail line, the approximately 16km WCS spur rail line and a 60-million tonne per year barge wharf.

Once complete, all co-developed infrastructure and rolling stock will be transferred to and operated by the Compagnie du Transguinéen (CTG) joint venture, in which Simfer and WCS each hold a 42.5% equity stake and the Guinean State a 15% equity stake.

First production from the Simfer mine is expected in 2025, ramping up over 30 months to an annualized capacity of 60 million tonnes per year (27 million tonnes Rio Tinto share). The mine will initially deliver a single fines product before transitioning to a dual fines product of blast furnace and direct reduction ready ore.

Simfer’s initial capital funding requirement for the Simandou project is estimated to be approximately $11.6 billion, of which Rio Tinto’s share is approximately $6.2 billion.

Rio Tinto expects its full year expenditure for 2023 to be around $0.9 billion to progress critical path works, including around $0.4 billion to be funded by CIOH after receiving Chinese regulatory approvals.

Full sanction of the project by the Rio Tinto Board is subject to remaining conditions being met, including joint venture partner approvals and regulatory approvals from China and Guinea.

Rio Tinto is reporting that the Proved Ore Reserves estimate for the Ouéléba deposit at Simandou contains 273 Mt at 66.4% Fe, 1.0% SiO₂, 1.2% Al₂O₃ and 0.07% P and the Probable Ore Reserves estimate contains 1,226 Mt at 65.0% Fe, 0.9% SiO₂, 1.8% Al₂O₃ and 0.10% P.

Rio Tinto is also reporting Mineral Resources exclusive of Ore Reserves for the Ouéléba and Mineral Resources for Pic de Fon deposits at Simandou of 1,360 Mt at 66.1% Fe, 1.5% SiO₂, 1.5% Al₂O₃ and 0.06% P consisting of Measured Mineral Resources of 153 Mt at 67.0% Fe, Indicated Mineral Resources of 460 Mt at 66.2% Fe and Inferred Mineral Resources of 746 Mt at 65.8% Fe. The Mineral Resources cut-off for reporting is Fe greater than or equal to 58% and Al₂O₃ + SiO₂ less than or equal 8% and P less than or equal to 0.25%.

The declaration of the 1,499 Mt Ore Reserves estimate is as a result of the conversion of 1,469 Mt of undiluted Mineral Resources, inclusive of dilution, at Ouéléba.

Mineral Resources and Ore Reserves are quoted on a 100% basis. Rio Tinto ownership percentage is 45.05%.