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Mega mining project that could cripple Australia
A crazy plan to build a mega mine with a 679km railway through the remote African countryside could spell big trouble for Australia
Among the emerald green mountains of West Africa, a mega mine with a complicated past is threatening to unravel Australia’s winning streak on natural resources.
Dubbed the Simandou mine, the massive site in Guinea is one of the largest, highest grade iron ore deposits in the world – having estimated reserves of 2.4 billion tonnes of the stuff beneath the red earth of its exterior.
The eyes of the world’s biggest importer of iron ore, China, have lit up at the prospect of exploiting the remote site, but it could spell big trouble for nations like Australia which make big money from exporting it.
In case you have missed the trials and tribulations of the past few weeks, iron ore – a vital ingredient in steelmaking – has come back to haunt China in a big way.
Although it needs record levels of it to keep pace with its breakneck plan to recover from the pandemic, iron ore has been in short supply.
That means, despite China’s efforts to bring the price down, iron ore has gone from strength to strengthAustralia’s Rio Tinto has remained a major player since it discovered deposits there in 1995. Concluding it would be uneconomic to develop back in 2015, it changed its mind last year as iron ore prices skyrocketed.
It now owns one half of the deposit with Chinese aluminium giant Chinalco and the Guinean government.
The other half had been held by companies with connections to Israeli mining giant Beny Steinmetz, who hammered out a multi-billion dollar deal with Brazilian major Vale, before they were stripped amid allegations of corruption against Mr Steinmetz.
The Guinean government then handed that half, in a tender, to a consortium of Chinese, Singaporean, French interests and Guinea’s government owned Alumina company.
Their plans for the site are huge – as they gear up to start pumping out ore, with almost all of it going directly to China, by 2025To make that happen, they plan to build a $US14 billion ($A18 billion) railway through the Guinean countryside – the likes of which West Africa has never seen before.
It would carry the precious ore from the mine to the future ore port of Matakong on the Guinean coast – some 679km away.
AI
