A consortium of Guinea's Societe Miniere de Boké and Singapore's Winning beat out Australia's Fortescue Metals Group Ltd. in a tender to develop blocks 1 and 2 of the Simandou iron ore project, which hosts over 2 billion tonnes of high-grade ore, Reuters and the Financial Times reported Nov. 13.
As part of the deal, the consortium, whose investors reportedly include Shandong Weiqiao Pioneering Group Co. Ltd. and Yantai Port Group Co. Ltd., agreed to build a 650-kilometer railway and deepwater port to allow export through Guinea's coast, according to the reports.
The consortium tabled a US$14 billion bid to develop the deposit and the infrastructure, and SMB-Winning Chairman Fadi Wazni confirmed the amount, a government source told Reuters.
Fortescue had made a US$9 billion bid for the two Simandou blocks but had not formally pledged to build the railway the government sought, two government sources told Reuters.
Past attempts to develop the project failed due to the steep price of building the railroad and export terminal, which Rio Tinto estimated to cost up to US$20 billion, according to the Financial Times. Rio Tinto has reportedly restarted development work on blocks 3 and 4 of Simandou after a planned sale to project partner Aluminum Corp. of China fell through.
In October, the Guinean government committed to completing a feasibility study of the railroad after reaching a deal that allowed miners in the country to use railroads in neighboring Liberia to export through the Buchanan port, which is regarded as the most cost-efficient method to ship iron ore from Guinea.
Blocks 1 and 2 of Simandou were owned by BSG Resources Ltd., which abandoned the project in February as part of a settlement with the government over corruption allegations.