Stake in huge iron ore mine in Guinea may cut China’s dependence on Australia

The Simandou mountains, a 110km (68-mile) range deep in the interior of southeastern Guinea, is home to the world’s biggest untapped supply of high-grade iron ore, and China believes it could help cut its reliance on Australian imports amid trade tensions.

The huge project, which holds an estimated 2.4 billion tonnes of iron ore graded at over 65.5 per cent, could diversify China’s supply chain but may not cut out Canberra completely, analysts say.

Australia is the source of about 60 per cent of China’s iron ore imports.

Although the presence of commercial-scale high-grade iron ore was confirmed in 2002, the Simandou mine has remained undeveloped because there is no railway line to transport the deposits to the sea for export. The project is also mired in political uncertainty and legal wrangles, including disagreements over who will develop the iron ore deposit.

W. Gyude Moore, a senior policy fellow at the Centre for Global Development and a former Liberian minister of public works, said that although the Guinean ore was of the highest quality, “the problem has always been Guinea’s insistence on building infrastructure to accompany the extraction of the ore – the trans-Guinea railway and a deep water port in Conakry”, the country’s capital.

Private firms had repeatedly balked at the cost of the infrastructure versus the price of the commodity, he said.