Rio’s Simandou mine secures $15bn fund

Developers of Guinea’s giant Simandou iron ore mine have agreed to a $US15 billion finance deal to kickstart development of what could one day become the world’s largest mine.

The deal for the Rio Tinto-backed $US26 billion African mine will enable construction of a 60-million-tonne-per-annum mine, 600 kilometres of rail, and new port infrastructure.

Some 45,000 jobs are expected to be created during the build which only includes the two blocks under Rio Tinto and China-backed Chalco Iron Ore Holdings’ portfolio.

A further two mining blocks dubbed Simandou North will be developed by Singaporean and Chinese consortiums.

“Simandou is no longer a dream but a reality,” Guinean government strategic committee head Djiba Diakite said.

“There is no doubt that the project will be delivered on schedule by the end of December 2025.”

At $US7.8 billion, the Simandou South mine will account for the lions’ share of the funding package.

Some $US5.4 billion will go towards a 70km spur line and transshipment vessel, and $US4.6 billion will be spent on the 536km heavy rail line.

Rio Tinto and Chalco hold 85 per cent of the port and rail infrastructure for the project, with the remain 15 per cent owned by the Guinean government.

Rio has already approved a $US6.2 billion investment into the mine.

Simandou is estimated to contain a 2.8 billion tonne iron ore resource and on current data holds an average 65.3 per cent grade.

Once fully operational the mine would boost global iron ore supply by about 5 per cent.