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【Ferro-alloys.com】 Mining giant Rio Tinto has welcomed a deal with the government of Guinea, which could see the Simandou iron-ore project finally developed.

Reuters over the weekend reported that the Guinea government had struck a deal with Rio and Chinese consortium SMB Winning for a 15% stake in the rail, port and mine operations, with new infrastructure to become Guinea state property upon completion.

Reuters quoted Guinea Mines Minister Moussa Magassouba, who said on state television late on Saturday that a framework agreement had been signed between the government and companies involved in the project.

He said the companies had "put aside many egos, many other interests to return to what is a win-win partnership for all parties."

Magassouba said infrastructure projects must be completed by December 2024 and commercial production must start by March 31, 2025, a timeline which Reuters analysts said was ambitious given the scale of the infrastructure that needs to be built.

Reuters reported that the agreement primarily concerned developing a 670 km (419 mile) railway from the Simandou site to a new deep water port, a plan that Magassouba said would cost about $15-billion.

In a statement to Mining Weekly Online, Rio’s copper CEO Bold Baatar welcomed the agreement.

“This is a positive step forward and demonstrates our ability and commitment to work with the government of Guinea and Winning Consortium Simandou (WCS) to progress the Simandou project. The framework clearly outlines the key principles for all parties to work together on the co-development of infrastructure and sets out how the project will be built to international ESG standards. We look forward to continuing to work with the government and WCS to finalise a definitive agreement aligned with this framework, which brings us a step closer to achieving mutual prosperity for Guinea and all stakeholders.”

Rio Tinto has held rights to Simandou since 1997. It owns a 45.05% stake in the southern half, Blocks 3 and 4, of the deposit, with Chinalco holding 39.95% and Guinea's government the remaining 15%.

SMB-Winning won a government tender in November 2019 for Blocks 1 and 2.

Once it is fully up and running, Simandou is expected to produce 100-million tonnes of iron-ore a year, with blocks 1 and 2 producing 60-million tonnes a year and Rio's blocks producing 40-million a year.

SMB Winning were forced to halt their operations in Guinea on March 10, after the parties failed to make process on an agreement. However, with the agreement now in place, SMB Winning has now been authorisee to resume operations at its part of Simandou. 

• [Editor:zhaozihao]