Chinese consortiums reach agreement with Guinean government for Simandou iron ore project

The Simandou project in Guinea has the world's largest reserves of high-quality yet unexploited iron ore, with an estimated annual production capacity of 120 million tons in its initial phase. Analysts said the deal marks a milestone in months of negotiations that will lay a solid foundation for the restart and exploration of the Simandou project.

It is important for China to diversify its iron ore import sources, which were heavily dependent on Australia, which previously accounted for more than 60% of China's total iron ore imports.

Analysts say that when completed, the Simandou project is expected to at least double China's ore imports from Africa, greatly enhancing China's pricing power in the international market.

Development of the project requires accompanying basic infrastructure, including more than 600 kilometers of railroads running east and west of Guinea, and a port on the country's west coast.