SMB-Winning awarded tender to develop Simandou iron mine blocks
2019-11-14 11:25:31 [Print]
A consortium of Guinea's Societe Miniere de Boke (SMB) and Singapore's Winning said on Wednesday it won a tender to develop blocks 1 and 2 of Guinea's giant Simandou iron ore project, edging out Australia's Fortescue in a $14 billion deal.
The consortium committed to developing the mine, which holds over 2 billion tonnes of high-grade ore, the largest known deposit of its kind, but which has been held up by legal disputes and high costs.
Guinea's government required prospective developers of Simandou to build a 650 km railway and deepwater port to transport the ore from the remote southeastern corner of Guinea to the coast for export.
The steep cost of that infrastructure had deterred miners from the otherwise attractive deposit. SMB-Winning put $14 billion on the table to develop the blocks and build the infrastructure, according to a government source. SMB-Winning chairman Fadi Wazni confirmed that figure.
Fortescue, meanwhile, offered $9 billion for the blocks but did not formally promise to build the railway dubbed the "Transguineen", two government sources said.
The issue of the Transguineen was pivotal in the decision to grant the blocks to SMB-Winning, the government sources said.
The two blocks became available after a settlement in February between Guinea's government and Israeli billionaire Beny Steinmetz's BSG Resources following a protracted legal dispute.
Blocks 3 and 4 of the mine are owned by a joint venture of Rio Tinto, China Aluminum Corp (Chinalco), and the Guinean government.
The consortium committed to developing the mine, which holds over 2 billion tonnes of high-grade ore, the largest known deposit of its kind, but which has been held up by legal disputes and high costs.
Guinea's government required prospective developers of Simandou to build a 650 km railway and deepwater port to transport the ore from the remote southeastern corner of Guinea to the coast for export.
The steep cost of that infrastructure had deterred miners from the otherwise attractive deposit. SMB-Winning put $14 billion on the table to develop the blocks and build the infrastructure, according to a government source. SMB-Winning chairman Fadi Wazni confirmed that figure.
Fortescue, meanwhile, offered $9 billion for the blocks but did not formally promise to build the railway dubbed the "Transguineen", two government sources said.
The issue of the Transguineen was pivotal in the decision to grant the blocks to SMB-Winning, the government sources said.
The two blocks became available after a settlement in February between Guinea's government and Israeli billionaire Beny Steinmetz's BSG Resources following a protracted legal dispute.
Blocks 3 and 4 of the mine are owned by a joint venture of Rio Tinto, China Aluminum Corp (Chinalco), and the Guinean government.
