Fortescue Metals Group has been beaten by a consortium including Guinea’s biggest bauxite exporter in a tender to develop key sections of the massive Simandou iron ore project in the West African country.
The consortium, which includes Société Minière de Boké (SMB) and represents Singaporean, Chinese and Guinean interests, is the preferred bidder for the development of Simandou Blocks 1 and 2.
Simandou hosts one of the world’s largest high-grade iron ore sites totalling more than two billion tonnes.
It is currently the largest integrated mining and infrastructure development planned in Africa, according to Rio Tinto, the co-owner of Blocks 3 and 4.
The SMB-Winning consortium plans to export its ore through Guinean territory, in line with the government’s strict conditions in the tender.
It will construct a 650 kilometre-plus railway and a deepwater port at Matakong off the coast of Guinea within five years of the agreement being ratified.
The consortium has already produced 42 million tonnes of bauxite in the Boké region in West Africa and hopes to replicate this success at the Simandou iron ore operations.
SMB employs 9000 people in the Boké region and has built two river terminals – Dapilon and Katougouma – at the port of Boké.
“(We) propose to replicate its economic and social model, focussed on responsibility and sustainability, in the iron mining of Simandou one and two,” SMB chairman Fadi Wazni said.
“We are convinced that the SMB-Winning consortium is the best partner to carry out project Simandou one and two alongside the government, local authorities and the Guinean people.”
The SMB-Winning consortium is comprised of the Singaporean shipowner Winning Shipping, Chinese aluminium producer Shandong Weiqiao, the Yantai Port group as well as the Guinean transport and logistics company United Mining Supply.
The state of Guinea, a partner and member of the consortium, holds 10 per cent interest in the project.
For the Singapore-based chairman and chief executive of the consortium, Sun Xiushun, the Simandou project will be decisive for the future of Guinea.
“This mega deposit is an opportunity in terms of employment and wealth creation for the whole country,” Sun said.
“With the transguinean railroad, Guinea will now have a real lifeline connecting four Guinean regions between them, accelerating the administrative and economic decentralisation, and strengthening the railway network of the country.”
Fortescue will continue to focus on its $US3.875 billion ($5.5 billion) investment in the Eliwana and Iron Bridge projects in the Pilbara, Western Australia.
“(The company) will continue to explore global opportunities aligned with our strategy and expertise,” Fortescue stated in an ASX announcement.