By Maxwell Akalaare Adombila
DAKAR (Reuters) -Rio Tinto has stockpiled 2 million metric tons of high-grade iron ore at its Simandou project in Guinea for a mid-November shipment, three sources told Reuters, which would be the first from the mega-mine set to reshape global supplies and pricing.
In its third-quarter production report on Tuesday, Rio said SimFer – one of the two mines at Simandou – had amassed 1.5 million tons of ore, with first ore loaded on rail transport in October.
A spokesperson said the company continued to advance the project “at pace”, without giving details.
SIMANDOU SEEN PUTTING PRESSURE ON HIGH-COST RIVALS
The inaugural shipment is expected to head to China, the world’s top steel producer and consumer of over 70% of seaborne iron ore, the sources said, speaking on condition of anonymity.
Rio will initially route exports through infrastructure owned by partner Winning Consortium Simandou, whose port is nearing completion.
“We expect to start loading a vessel around November,” Rio said on Tuesday, without disclosing the initial volumes.
Ownership of Simandou, which is linked to the Atlantic via a 600-kilometre (373-mile) railway and deepwater port, is split between a consortium of Rio and Chinese state-owned Chalco, and WCS, a Singaporean-Chinese consortium.
Simandou, which holds an estimated 4 billion tons of ore averaging 65% iron content, is expected to deliver 120 million tons annually at full capacity, with SimFer contributing half.
The project is forecast to boost Guinea’s GDP by 26% by 2030, according to the International Monetary Fund.
Guinea’s military government plans to formally commission the project on November 11.
WCS, which operates Simandou’s other mine, also began stockpiling ore in September, setting up a race for early market share.
“Iron ore prices could face downward pressure if Australian and Brazilian miners don’t respond to Simandou’s ramp-up,” said Tom Price, head of commodities at Panmure Liberum.
“A 120 million tons annual output by 2028 would lift seaborne supply by 8–9%.”
Rio finance chief Peter Cunningham said in July that Simandou’s launch would likely force some higher-cost suppliers out of the market.
The project’s debut comes as China tightens its grip on Guinea’s resource sector, leading bauxite exports.
Chinese steelmakers, squeezed by margin pressures and a prolonged property downturn, are pivoting to lower-cost, high-grade ore to cut emissions and energy use.
WCS and Guinea’s mines ministry did not respond to requests for comment.
(Reporting by Maxwell Akalaare Adombila. Additional reporting by Clara Denina. Editing by Veronica Brown and Mark Potter)
