Following completion of all Chinese regulatory approvals, Rio Tinto and Chalco have completed the formation of their joint venture to develop and operate the Simandou iron ore project in Guinea. As a result, a consortium led by Chalco has made an earn-in payment of $1.35 billion, in line with an agreement reached with Rio Tinto in March 2010.
Rio Tinto and the Chalco consortium now hold 53% and 47% interests, respectively, in the joint venture, which translates into 50.35% and 44.65% interests in the Simandou project. The International Finance Corporation holds the remaining 5% of the project. The Government of Guinea retains options for participation in the project and is expected to take up its first share in the near future.
The Simandou project has three principal components: a 95-million-mt/y iron ore mine in the Simandou Range in south eastern Guinea; a trans-Guinean railway of approximately 650 km to transport the ore from the mining concession to the Guinean coast; and a new, deep-water port currently planned to be located south of Conakry in the Forécariah prefecture. The first shipment of ore is expected by mid-2015. Simandou South will be the largest integrated iron ore mine and infrastructure project ever developed in Africa.