African Iron Ore Group Limited and Société Guinéenne du Patrimoine Minier have announced the formation of a joint venture company to develop and finance infrastructure for the Simandou South iron ore mining project in Guinea.
Société Guinéenne du Patrimoine Minier (SOGUIPAMI), the government of the Republic of Guinea's investment vehicle, will work with African Iron Ore Group within the framework of the new company, Infrastructures Minières de Guinée Holdings(IMG). SOGUIPAMI will own 60 per cent of IMG and AIOG will own 40 per cent.
Located in the south-east of Guinea, Simandou South is set to be the largest integrated iron ore mine and infrastructure project ever developed in Africa. The project will comprise an iron ore mine of 95 million tonnes per year capacity in the Simandou Range in south-eastern Guinea; a Trans-Guinean railway of approximately 650 kilometres to transport the ore from the mining concession to the Guinean coast; and a new deepwater port currently planned to be located south of Conakry in the Forécariah prefecture.
First ore is expected to be shipped by mid-2015.
IMG will own the government of Guinea's 51 per cent interest in SPV Simfer, the special purpose vehicle that will build, operate and own the infrastructure, including the railway and deepwater port, for Simandou South. Rio Tinto, Chalco and the International Finance Corporation will each have interests in the remaining 49 per cent of SPV Simfer.
Each of the shareholders in SPV Simfer will be expected to fund the cost of the infrastructure pro-rata to their shareholding.
Commenting on the announcement, Ethelbert Cooper, founder and chairman of African Iron Ore Group, said: "This is an important milestone in the development of the infrastructure required to monetize the value in the Simandou South iron ore deposit. With production targeted for mid-2015, the infrastructure development program needs to be fast-tracked. We believe we have the expertise, the relationships and the ‘best in breed’ Chinese partners required to assist with the funding and development of the infrastructure required for Simandou South."
Mohamed Lamine Fofana, minister of mines and geology of the Republic of Guinea and chairman of IMG, said: "We are pleased to announce the agreement to form IMG, the joint venture company, with our partner African Iron Ore Group who we have chosen to assist the government with the development and the financing of infrastructure for the Simandou South iron ore mining project.
“The formation of IMG will signal the start of negotiations on SPV Simfer and the infrastructure required to support the Simandou South mining project. The construction of a trans-Guinean railway and deep water port is of critical importance to the country as we seek to maximise our large iron ore resources for the benefit of the nation as a whole."
