Guinea proceeding with $20bn mine and rail project

Rio Tinto and Chinalco are searching for investors to back a $20 billion mine and rail project in Guinea after signing an agreement with the country’s government.

Described by Rio Tinto as being similar in scale to its operation in the Pilbara, Australia, which currently extracts 220 million tonnes of iron ore from the ground each year, the Simandou project includes plans for a 650-kilometre railway from the mine to the Guinean coast.

The agreement, which was signed between the Government of Guinea, Rio Tinto, Chinalco and the IFC in Conakry earlier this week, provides the legal and commercial foundation for the project.

Simandou will be the largest combined iron ore and infrastructure project ever developed in Africa, doubling the country’s current GDP

A decision will now be taken by the Guinean National Assembly as to whether to ratify the agreement or not.

President of the Republic of Guinea Alpha Condé said: “With massive infrastructure investment, this Project is of critical importance for the people of Guinea. It’s a nationwide priority that goes beyond the mines and far beyond our generations.

“With transparent and fair deals, our mining sector has the potential to be a game changer for Guinea. This Project also represents a symbol of our continent’s tremendous efforts to meet its infrastructure challenges and build inclusive growth.”

Alan Davies, chief executive of diamonds  and minerals at Rio Tinto, said: “The signing of the IF is testimony to the commitment of all the partners to progress the Project and is the culmination of years of collaborative and tremendous work.

“We will now concentrate on progressing the plans for the development of the mine and pulling together the consortium of investors who will finance and develop the infrastructure.”