Winning Consortium Simandou (WCS)1 and Rio Tinto SimFer2 have signed investment agreements in relation to the construction of the Trans-Guinean railway and port infrastructure, marking a further major milestone in the development of the Simandou project.
These investment agreements define the terms on which Rio Tinto SimFer will invest to take a 34% stake in the WCS companies responsible for constructing most of the infrastructure for the Simandou project, which will deliver more than 600 kilometers of multi-use railway together with port facilities to export iron ore from mines being developed by WCS (blocks 1 and 2) and Rio Tinto SimFer (blocks 3 and 4). This step is consistent with the overall 50:50 funding of the entire rail and port infrastructure for the Simandou project.
These agreements will accelerate the first placement of USD 100 million financial contribution from Rio Tinto through an interim loan to pursue the continued development of these infrastructures.
The investment agreements follow the signing on 11 August 2023 of the convention creating the legal framework for the co-development of the Trans-Guinean rail and port infrastructure between WCS, Rio Tinto SimFer and the Government of Guinea, and the incorporation on 28 July 2022 of the CTG joint venture between the Republic of Guinea, WCS and SimFer. The parties continue to negotiate the joint venture arrangements and commercial agreements to implement co-development to achieve both timely execution and international ESG standards.
The railway and port infrastructure being built by WCS and SimFer will be transferred following construction to the Compagnie du TransGuinéen (CTG)3 to open up a large-scale transport network across Guinea, contributing to economic development and access to services across the infrastructure corridor.
China Baowu Steel Group (Baowu) has also concluded separate investment agreements to partner with WCS for the development of the Simandou railway and port infrastructure, and in developing the WCS mine at Simandou blocks 1 and 2.
Winning Consortium Simandou Chairman, Mr. Sun Xiushun, said: “We extend our sincere gratitude to the Government of the Republic of Guinea for their vision and support under the leadership of President Mamadi Doumbouya, as well as to all our industrial partners. The signing of these investment agreements represents a significant milestone, paving the way for the successful delivery of the project. With plans to create 50,000 jobs at its peak, WCS will offer employment opportunities to tens of thousands of Guineans and promote local enterprise development across its footprint.”
The Executive Committee Member of Rio Tinto responsible for Guinea and the CEO of Rio Tinto Copper, Bold Baatar said: “With this agreement we are strengthening our partnership with WCS, as we build momentum to deliver the Simandou project under the vision laid out by the Government of Guinea. We are already progressing critical path works across our sites and we are committed to working closely with all our partners to realise the extraordinary potential that Simandou offers for the people of Guinea, today and for future generations.”
The President of the Strategic Monitoring Committee for Simandou, Mr. Djiba DIAKITÉ, commended the efforts made at various levels to consolidate and uphold the commitments outlined in the foundational documents signed on August 10th. He also urged the industrial partners to accelerate on-site work and complete the financing operations with financial partners, as well as obtaining the necessary approvals.
Investments into the infrastructure joint venture vehicle remain subject to a number of conditions, including the finalisation and approval of the feasibility study and capital funding requirements for the project by all partners, and regulatory approvals including competition authorities and other governmental approvals from the Guinean and Chinese States.
[1] WCS is a consortium between Winning International Group (49.99%), Shandong Weiqiao Group (part of the China Hongqiao Group) (49.99%) and United Mining Services (UMS) (residual).
[2] The SimFer joint venture comprises SimFer S.A., the holder of Simandou South Blocks 3 & 4, which is owned by the Government of Guinea (15%) and SimFer Jersey Limited (85%). In turn, SimFer Jersey Limited, is a joint venture between the Rio Tinto Group (53%) and Chalco Iron Ore Holdings (CIOH) (47%) – a Chinalco-led joint venture of leading Chinese SOEs (Chinalco (75%), Baowu (20%), China Rail Construction Corporation (CRCC) (2.5%) and China Harbour Engineering Company (CHEC) (2.5%).
[3] CTG is a joint venture company held by Rio Tinto SimFer and WCS (each 42.5%) and the Government of Guinea (15%) formed to operate the Simandou rail and port infrastructure.
