Rio Tinto moves closer to infrastructure build at Simandou

The mining group said it had concluded agreements to create the legal framework for the development of new multi-use rail together with port facilities to export mined iron ore from far southeast of Guinea to its maritime borders and beyond.

Simandou has the last known, largest untapped high-grade iron ore deposit in the world, according to Rio Tinto. The company says that the premium grade iron ore there will be essential for the decarbonisation of steel production, as steelmakers look for lower-impurity ore.

Rio Tinto is the majority shareholder of Rio Tinto Simfer, a joint venture with Hong Kong's Chalco Iron Ore Holding and the Guinean government. Simfer is currently developing two of the four blocks that make up Simandou; the remaining two are being worked on by China-backed consortium, Winning Consortium Simandou (WCS). Simfer and WCS will share the costs of the infrastructure development equally.

The company's executive committee lead for Guinea Bold Baatar said these agreements will "unlock this world class resource", and Simandou will "strengthen Rio Tinto's portfolio by complementing our existing Pilbara and Iron Ore Company of Canada products".

In a statement, the FTSE miner reported: "The Co-Development Convention requires ratification by the Guinean State. It is also subject to a number of conditions, including the Guinean State's approval of the final feasibility study for the project. Negotiations continue between the partners to finalise the investment agreements and related shareholders' agreements which underpin the co-development."

Rio Tinto was trading 0.8% lower at 4,754.18 in early deals on Friday.