GUINEA intends to maintain elevated prices for premium iron ore as its Simandou project prepares to ship its first cargoes this month, said Reuters quoting senior officials of the West African government.
This could create tension with China, which owns 75% of the deposit and consumes more than 70% of global iron ore. Beijing has recently centralised imports and pushed for lower prices.
“Our main interest is to keep prices high,” said Bouna Sylla, Guinea’s mines minister, speaking in Conakry. He indicated the country would draw on Rio Tinto’s expertise but offered no specific details.
The Simandou deposit, expected to reach peak production of 120 million tons annually, is divided between Rio Tinto’s partnership with Chinese state-owned Chalco and WCS, a Singaporean-Chinese consortium backed by steel giant Baowu.
Sylla said Guinea aims to circumvent China by marketing its share of Simandou’s high-grade ore directly to European and Middle Eastern buyers. The country will receive 15% of production from each mining block.
The ore, grading 65% iron content, targets the premium segment used in lower-carbon green steel production, putting Guinea in direct competition with established suppliers Australia and Brazil.
Erik Hedborg from consultancy CRU Group said Guinea’s allocation gives it unusual leverage in the emerging green steel market, whilst placing Rio Tinto in competition with Brazilian producer Vale.
The $20bn development, which includes a 650-kilometre railway and deepwater port, was originally scheduled for 1997 but faced repeated delays, said Reuters. Guinea’s military government halted work in 2022 before allowing it to proceed, it said.
Officials said the country plans to build pellet and direct reduced iron facilities to supply green steel manufacturers in Europe and the US.
