Rio Tinto CEO says Guinea’s Simandou iron ore project is being ‘progressed’

The Simandou iron ore project

RIO Tinto was making progress with the development of Simandou, a large iron ore project in West Africa’s Guinea, said Bloomberg News citing Jean-Sebastien Jacques, CEO of the mining group.

“There is more activity in Guinea,” said Jacques in an interview on Friday. “COVID-19 remains a concern and the movement is pretty slow, but we are progressing our studies as we speak with our Chinese partner.”

“We’re looking at the project on its own merits. We have a development pathway for the Pilbara, we are looking at a Simandou option – it’s still early days,” said Jacques.

Rio holds 45% of Simandou’s blocks 3 and 4 – which contains an estimated 2.8 billion tons of ore, said the newswire. China Baowu Steel Group is leading a consortium to acquire Chinalco’s 40% Simandou stake which Rio Tinto once thought of buying.

According to Tyler Broda, an analyst for RBC Capital Markets, Rio Tinto might in Simandou see an opportunity to protect its market share in iron ore given there are competing plans to build Simandou blocks 1 and 2. BHP, Rio Tinto’s rival, is also working on boosting iron ore exports from its Australian base.

“We would view this as a change in tack from Rio management and a potentially interesting one,” Broda is quoted in the Bloomberg News article as having said. “Rio could be making the first moves to protect its iron ore market share.”

Firing up production from the small West African nation would add a new source of high-quality ore and deliver a challenge to some lower-grade exports from Australia and Brazil, the existing largest suppliers, said Bloomberg News.