Gemfields pauses Mozambique operation amid political unrest
The miner said that groups "took advantage" of political unrest to attempt to invade its site.
Rio Tinto Group is making progress on the development of Guinea’s giant Simandou iron-ore deposit, bringing a potential overhaul of global supply of the steel-making material closer into view.
Firing up production from the small West African nation would add a new source of high-quality ore and deliver a challenge to some lower-grade exports from Australia and Brazil, the existing largest suppliers.
Guinea is now regarded as a growth option alongside development of new mines in Australia’s Pilbara region
“There is more activity in Guinea,” Rio’s CEO Jean-Sebastien Jacques said in an interview. “Covid-19 remains a concern and the movement is pretty slow, but we are progressing our studies as we speak with our Chinese partner.”
The renewed effort marks a turnaround for London-based Rio, after an earlier deal to sell its share in Simandou to partner Aluminum Corp. of China, known as Chinalco, wasn’t completed. Guinea is now regarded as a growth option alongside development of new mines in Australia’s Pilbara region.
“We’re looking at the project on its own merits. We have a development pathway for the Pilbara, we are looking at a Simandou option — it’s still early days,” Jacques said in the interview on Friday.
Rio holds 45% of Simandou’s blocks 3 and 4 – which contains an estimated 2.8-billion tons of ore – and China Baowu Steel Group is leading a consortium to acquire Chinalco’s 40% stake, Caixin reported last month. China’s State-owned Assets Supervision and Administration Commission is pushing companies to move forward with the project, people familiar with the plans said in March.
A separate project covering the other half of Simandou – blocks 1 and 2 – could be up and running within five years, producing about 60-million tons a year in an initial stage and then expanding to more than 100-million tons a year, according to Societe Miniere de Boke, part of a consortium with Singapore’s Winning Shipping and Guinea’s government.
The prospect of a rival Guinea development and a potential move by BHP Group to boost export volumes in Australia may be acting to focus Rio’s attention on its plans, RBC Capital Markets analyst Tyler Broda said in a note last week.
“We would view this as a change in tack from Rio management and a potentially interesting one,” Broda said. “Rio could be making the first moves to protect its iron ore market share.
(By David Stringer)
Comments