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IRON ORE
August 2015
MODERN MINING
41
A blast at Kumba’s Sishen
mine, Africa’s biggest iron
ore mine. It will produce
33 Mt of iron ore in 2015
(photo: Kumba Iron Ore).
in Congo) to Lolabe on the Cameroon coast
to transport the ore. Also required is a Multi-
Terminal Facility at Lolabe capable of loading
‘China-max’ vessels.
As a result of this heavy infrastructural
demand, the total cost of the project has been
put at around US$5 billion – a huge hurdle
for Sundance, essentially a junior company,
to clear given current market conditions. The
company though has made what it calls a
“breakthrough” on this front, having signed
a Transition Agreement with the Cameroon
Government in June this year moving the fund-
ing and ownership of the port and rail link to
the latter, leaving Sundance with responsibility
for just the mine infrastructure.
Another project with a major infrastructural
component is Rio Tinto’s
Simandou
in Guinea,
said to host one of the world’s largest untapped
(over 2 billion tonnes), high grade iron ore
resources. According to Rio (whose partners in
the project include Aluminium Corporation of
China (Chinalco) and the International Finance
Corporation), the resource can sustain a mine
life in excess of 40 years at a production rate of
100 Mt/a and has the potential to make Guinea
one of the world’s top iron ore exporters. It
requires, however, a new multi-user 650 km
long railway line, the Trans-Guinean, linking
south-east Guinea with the coast along the
Southern Growth Corridor, as well as a new
deep-water port at Moribaya, south of Conakry,
which will be the first in Guinea to provide
access to large cargo ships.
The cost of the project is estimated at a huge
US$20 billion (which would make it the biggest
ever African mining development), with about
two-thirds of this going into the infrastructure.
Balanced against this, the economic impact of
the project would be substantial and it would
probably double the size of Guinea’s GDP.
Rio’s plan is to develop Simandou in stages.
Stage 1 encompasses the development of the
southern Ouelaba mine to a capacity of approx-
imately 50 Mt/a while Stage 2 would see the Pic
de Fon deposit being developed, which would
double capacity to 100 Mt/a.
The tentative date for first production
at Simandou is 2019 but it not clear at the
moment what impact – if any – the plunge in
the iron ore price will have on this timeline.
Of course, the public image of the project has
been damaged by the ongoing dispute – now
before the US courts amongst others – over
two of the exploration blocks at Simandou,
with Rio reportedly claiming that Beny
Steinmetz’s BSGR and Brazilian iron ore giant
Vale had conspired to “snatch” its rights to
the two blocks. As far as
Modern Mining
is
aware, the blocks in question do not figure in
the current development plan so – in theory
– the legal wrangling should not impede the
progress of the project but it could certainly
deter potential investors.
Elsewhere in West Africa the outlook for
new iron ore mining ventures is mixed. Many
of the juniors are continuing to work on their
projects but few seem to have made any really
significant progress in recent months.
In Cameroon AIM-listed International
Mining & Infrastructure Corp (IMIC) is plan-
ning an initial 1 Mt/a mining operation at
Nkout
and has promised a PFS in H2 2015
while, in Guinea, Sable Mining Africa, also
listed on AIM, is continuing to progress its
Nimba
project. A PFS on Nimba completed
in March last year outlined a US$299 mil-
lion mine able to produce 3 Mt/a and Andrew
Groves, the company’s Chief Executive Officer,
said earlier this year that the goal was to
The cost of
Simandou is
estimated at
a huge US$20
billion (which
would make it
the biggest ever
African mining
development),
with about two-
thirds of this
going into the
infrastructure.