Singapore-backed Guinea mine set to reshape global iron-ore market

Photo source: pinsentmasons.com/GMK Center

Operations have begun at Guinea’s US$23bn Simandou iron ore project, in which the Singapore-based Chinese mining firm Winning International is a major stakeholder. Simandou – home to the world’s largest untapped reserve of high-grade iron ore – has been nearly three decades in the making. First initiated by mining company Rio Tinto in 1997, the project was held back for years by legal disputes, political uncertainty and shifting ownership. Africa’s largest mining development has now moved into production and is expected to have far-reaching effects on the global iron-ore market.

The deposit, located along the Simandou mountain range in southeastern Guinea, is divided into four blocks. Blocks 1 and 2 are being developed by the Winning Consortium Simandou, comprising Winning International – active in shipping, mining and railway construction – alongside China’s Shandong Weiqiao Group and China Baowu Steel Group. Blocks 3 and 4 are controlled by Rio Tinto Simfer, a joint venture between Rio Tinto and China’s Chalco Iron Ore Holdings. The Guinean state holds a 15% stake in both sets of blocks. Combined output from the two sites is projected to reach around 120m tonnes a year by 2030, once full production is achieved.

A major component of the project has been the construction of new infrastructure to transport ore from the mountainous interior to the coast. The two consortia jointly financed a 600km railway line as well as new port facilities to support large-scale exports.

Much of iron ore extracted from Simandou is expected to go to China, given its demand appetite and the significant investments Chinese companies have made in the project. The venture carries strategic importance for Beijing, which has relied on Australian iron ore for almost half a century. Simandou introduces a significant new source of iron ore into the market, allowing China to diversify its supply and strengthen its leverage in price negotiations with Western mining giants BHP. Chinese media reports say have reported that the latter has been asking for $US110 a tonne, while the China's state-backed iron ore buyer China Mineral Resources Group (CMRG) is trying to hold down the cost at $US80 a tonne. In the midst of this price negotiations came rumours that China was about to block BHP iron ore shipments. 

As a pure mining company, Rio Tinto shares Guinea’s interest in higher iron ore prices, whereas some Chinese stakeholders – whose businesses also include steelmaking and processing – favour lower prices. With China importing 73% of the world’s iron-ore supply in 2024 and moving to centralise procurement, the output from Simandou could push iron ore prices down. 

Simandou is regarded as a key source for ‘green steel’ because its exceptionally high-grade ore allows for a less carbon-intensive production process. On the face of it the production could not have come at a better time for China. After years of exploitation Australian mines are running out of high-grade iron that China needs. But now the government of Guinea says it wants to ‘bypass China’ and sell the high-grade ore from its 15% stake directly to buyers in Europe and the Middle East, which are major markets for green steel. This would give Guinea rare leverage in an emerging segment of the industry currently dominated by Australia and Brazil.

 

References

'Simandou: Is Africa’s biggest mining project finally ready to go?', African Business, 02 February 2024

'Rio Tinto's Guinea iron-ore mine and infrastructure project clears all regulatory hurdles', Mining Weekly, 16 July 2024

‘Guinea's vast Simandou mine on track to start delivering for Chinese investors’, South China Morning Post, 05 February 2025

'Singapore firm anchors West Africa’s mega mine: Inside Winning International’s Simandou play', The Business Times, 20 October 2025

'Guinea aims for global high-grade iron ore leverage with Simandou launch', Reuters, 12 November 2025

'Simandou partners mark start of operations at Africa’s biggest iron-ore project', Mining Weekly, 12 November 2025

'Guinea shakes up global iron ore market', Geopolitical Futures, 14 November 2025

'Why first Simandou iron ore shipment to China marks a global milestone', South China Morning Post, 15 November 2025