Steel giant Baowu’s increased role in the Simandou project underlines China’s determination to reduce its dependency on Australian iron ore.
| China has moved closer to reducing its dependence on Australia iron ore with a landmark deal in Guinea, West Africa, that will unlock one of the world’s biggest unexploited deposits after more than a decade of negotiations.
China is determined to reduce its dependency on Australian and Brazilian iron ore, which account for most of its steel-making needs.While it has increased domestic production and sought more supply from Russia and Mongolia, that would only be a fraction of the game-changing supply offered by the Simandou project which, analysts said, would become the world’s third-largest producer after Australia and Brazil, and account for 10 per cent of global iron ore supply.
Winning International, the Singapore-based shipping firm and the largest stake-holder in WCS, refused an interview request, citing “the sensitive nature of ongoing negotiations with the government of Guinea and other industrial partners”. In November, Fortescue Metals boss Andrew Forrest, who is also advancing plans to expand in Africa, had a swipe at Rio’s Simandou investment.
Analysts note WCS has a track record of getting ambitious infrastructure projects off the ground in Guinea.the infrastructure projects must be completed by December 2024 and commercial production must start by March 31, 2025. Construction of the rail link was dramatically halted in July last yearHowever, it is understood work is now progressing.
Together with its partners, Winning International played a pivotal role in accelerating Guinean bauxite exports. The SMB-Winning Consortium claims to have invested almost $US3 billion in infrastructure in Guinea, including $US700 million on a 123-kilometre railway between the Santou mining zone and Dapilon port.