bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

sponsorType

authorLocations

authors

paywallTypes

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

factSheets

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

copyrighted

customTimezone

liveContents

Jevans Nyabiage

When Guinea’s military toppled president Alpha Condé in a coup on September 5, it assured mining companies that they would be allowed to continue their activities.
The military junta promised that “existing regulations, contracts and investments will be respected”.
But then last week the junta suspended operations at the Simandou iron ore project, one of the largest undeveloped iron ore deposits in the world.
The project has been hit by delays due to years of disputes over ownership and slow progress on the 650km (400-mile) railway needed to transport iron ore to the Guinean ports.
Interim president Mamady Doumbouya said work had not progressed at the site and it was not clear how the mine contributed to national interests.
The decision was a major setback for China, according to observers.
Not only does a Chinese-backed consortium have a major stake in its development, China sees the Simandou site as a potential source of ore to help reduce its reliance on accessible, cost-effective supplies from Australia.
Guinea coup adds to growing knots in China’s belt and road plans
Simandou is divided into four blocks with an estimated 2 billion tonnes in commercial-scale, high-grade iron ore reserves.
Anglo-Australian multinational Rio Tinto owns 45 per cent of Blocks 3 and 4, while Aluminum Corp of China, or Chinalco, holds 40 per cent and Guinea’s government has the remaining 15 per cent. Blocks 1 and 2 were awarded in 2019 to the Société minière de Boké (SMB), a consortium formed by Singaporean shipowner Winning Shipping, Chinese aluminium producer Shandong Weiqiao, the Yantai Port Group and the Guinean transport and logistics company United Mining Supply.
Australia supplies about 60 per cent of China’s iron ore imports but ties between the two countries have been strained since Australia called for an international investigation into the origin of the coronavirus and banned Chinese company Huawei Technologies Co. from its 5G network.
That dependence has been driven home in recent weeks with sanctions on Russia driving up the price of commodities, including Australian iron ore.
W. Gyude Moore, a senior policy fellow with the Centre for Global Development and a former Liberian public works minister, said Simandou was one of the few places with the quantity and quality to feed China’s industrial demand as it reduced its dependence on Australian minerals.
“The sanctions on Russia will very likely harden China’s resolve to reduce its exposure to future tariffs or sanctions. Guinea will remain important for both its iron ore and bauxite,” Moore said.
He said the Simandou project also had a hallowed place in the economic hopes of the Guinean people.
“It’s not simply another mine. It is highly political and the idea that it is the linchpin of Guinean economic growth is now fully settled into the country’s psyche,” Moore said.
However, those expectations had run into the hard economics of a mining project and the scale of the infrastructure build attached to it, Moore said.
“Guinea’s insistence of ‘Guinean resources over Guinean territory’ inevitably means that there will be give and take. It appears that the junta is not pleased with how much Guinea has to give,” he said.
China’s appetite for Australian bauxite may climb after Guinea coup
Lauren A. Johnston, a visiting senior lecturer at the University of Adelaide, said Simandou was “the golden goose that Guinea seems unwilling to risk giving away cheap or unsurely”.
Johnston said the Russia-Ukraine factor might also be at play since Russia was active in Guinea.
Guinea was non-aligned but could not extract the ore without support from a combination of aligned and non-aligned countries, she said.
“It doesn’t matter who is in power. The dynamics seem complex. But Guinea is historically always non-aligned,” said Johnston, who is also the founder and managing director of New South Economics.

Any change that adds uncertainty to the geopolitical situation in Guinea is likely to hurt the development of a project like Simandou, according to Erik Hedborg, principal analyst at commodities consultancy CRU Group.
Hedborg said that for China, or any country that imported large volumes of iron ore, it certainly helped to have a looser market with more countries available to supply volumes to the market.
“Simandou, if developed fully, could take a global market share of nearly 10 per cent of seaborne exports,” Hedborg said. He said this would reduce iron ore prices and help to reduce the reliance on Australia and Brazil.
“However, it is important to stress the words ‘reduce the reliance’ since it would be a very marginal reduction. These countries are extremely competitive with their developed mine infrastructure, large scale of operation and fantastic iron ore reserves,” he said.
“That means they would still be in a very good position even if iron ore prices start falling to a very low level – and it is likely to be smaller, high-cost producers in other parts of the world that would have to stop operations as prices come down.”
As EU gears up to rival China in Africa, will deeds match words?
Besides iron ore, Guinea is rich in bauxite, a key raw material for the aluminium industry; and China is the biggest importer of the mineral.
Anthony Everiss, a senior aluminium analyst at commodities consultancy CRU Group, said it had been business as usual for the bauxite sector in Guinea. “Chinese investments in bauxite have been fast and furious, and we have continued to see sizeable mining operations ramp up in Guinea,” Everiss said.
He said there was a spate of disruptions at the start of the year but this was not necessarily anything new in the Guinea bauxite mining sector, he said. “We do believe that a review is likely to happen for bauxite mining contracts in Guinea, but this is likely to be a very prolonged process,” Everiss said.
Other key investors in Guinea, which supplies about 20 per cent of the world’s bauxite, include Rusal of Russia and Chinalco.
Chinese tabloid Global Times reported early in the week that “company representatives and officials are actively seeking a joint solution to a quick resumption of work at the Simandou project in Guinea”.
Moore said China had been in Africa for the last two decades and a resolution to the Simandou suspension was possible.
“I think the Chinese will find a workaround in Guinea,” he said.


What Xi’s flying visit to Morocco means for China’s EV industry

In Nairobi’s CBD, street photographers and social media content creators thrive

An average of 140 women and girls killed by a partner or relative each day in 2023: UN

Chinese firms bet on African gold as prices surge in the face of uncertainty

Africa

Could Guinea’s junta sink China’s plans to wean itself off Australian iron ore?

The Simandou iron ore reserves are believed to be among the biggest in the world. Photo: Rio Tinto

Colonel Mamady Doumbouya (centre) and his team of Guinean special forces ousted president Alpha Conde in a coup. Photo: AFP

Is time up for China’s non-interference take on overseas coups?

Guinean special forces celebrate with Guineans after detaining Guinean president Alpha Conde in September. Photo: EPA-EFE/STR

China to ‘significantly increase’ iron ore output, boost use of scrap steel to develop greener ferrous industry

No specific goals were given on Monday, unlike a draft plan released at the end of 2020 that had aimed for China’s top five steelmakers to account for 40 per cent of total steel output by 2025. Photo: EPA

No specific goals were given on Monday, unlike a draft plan released at the end of 2020 that had aimed for China’s top five steelmakers to account for 40 per cent of total steel output by 2025. Photo: Barcroft Media via Getty Images

China’s energy curbs blunt demand for bauxite after Guinea coup stokes supply fears

A military coup in Guinea, a major bauxite producer, stoked fears about supply chain disruptions for the mineral earlier this month. Photo: AFP

A military coup in Guinea, a major bauxite producer, stoked fears about supply chain disruptions for the mineral earlier this month. Photo: EPA-EFE

News

China

Diplomacy

Work is on hold at the China-backed Simandou mine, home to one of the biggest undeveloped reserves in the world
The operation is central to Guinea’s economic ambitions and China’s hopes of diversifying its supplies


Work is on hold at the China-backed Simandou mine, home to one of the biggest undeveloped reserves in the world.


Could Guinea’s junta sink China’s plans to wean itself off Australian iron ore?

Work is on hold at the China-backed Simandou mine, home to one of the biggest undeveloped reserves in the world The operation is central to Guinea’s economic ambitions and China’s hopes of diversifying its supplies

Work is on hold at the China-backed Simandou mine, home to one of the biggest undeveloped reserves in the world

The operation is central to Guinea’s economic ambitions and China’s hopes of diversifying its supplies