Simandou mine
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The Simandou mine is a large
iron Iron () is a chemical element with symbol Fe (from la, ferrum) and atomic number 26. It is a metal that belongs to the first transition series and group 8 of the periodic table. It is, by mass, the most common element on Earth, right in f ...
mine located in the
Simandou Simandou is a range of hills located in the Nzérékoré and Kankan regions of southeastern Guinea, in the country's mountainous, forested ''Guinée Forestière'' region. At the southern end of the range the site of a large iron ore deposit i ...
mountain range of southern
Guinea Guinea ( ),, fuf, 𞤘𞤭𞤲𞤫, italic=no, Gine, wo, Gine, nqo, ߖߌ߬ߣߍ߫, bm, Gine officially the Republic of Guinea (french: République de Guinée), is a coastal country in West Africa. It borders the Atlantic Ocean to the we ...
's
Nzérékoré Region The Nzérékoré Region ( nqo, ߒߛߙߍߜߍ߬ߘߍ߫ ߕߌ߲߬ߞߎߘߎ߲) is a region in the southern part of Guinea. Its capital and largest city is Nzérékoré. It is one of the eight regions of Guinea. It is bordered by the countries of Sier ...
. Simandou represents one of the largest
iron ore Iron ores are rocks and minerals from which metallic iron can be economically extracted. The ores are usually rich in iron oxides and vary in color from dark grey, bright yellow, or deep purple to rusty red. The iron is usually found in the fo ...
reserves in Guinea and in the world, having estimated reserves of 2.4 billion tonnes of ore grading 65% iron metal. The Pic de Fon and Ouéléba iron deposits are located approximately 4 km from one another at the southern end of the Simandou Range, approximately 550 km ESE of the capital,
Conakry Conakry (; ; sus, Kɔnakiri; N’ko: ߞߐߣߊߞߙߌ߫, Fula: ''Konaakiri'' 𞤑𞤮𞤲𞤢𞥄𞤳𞤭𞤪𞤭) is the capital and largest city of Guinea. A port city, it serves as the economic, financial and cultural centre of Guinea. Its p ...
. Both deposits are approximately 7.5 km in length and up to 1 km wide. At both
banded iron formations Banded iron formations (also known as banded ironstone formations or BIFs) are distinctive units of sedimentary rock consisting of alternating layers of iron oxides and iron-poor chert. They can be up to several hundred meters in thickness a ...
(metamorphosed to staurolite-grade
itabirite Itabirite, also known as banded-quartz hematite and hematite schist, is a laminated, metamorphosed oxide-facies iron formation in which the original chert or jasper bands have been recrystallized into megascopically distinguishable grains of quar ...
s) have been enriched to form haematite and haematite-
goethite Goethite (, ) is a mineral of the diaspore group, consisting of iron(III) oxide-hydroxide, specifically the "α" polymorph. It is found in soil and other low-temperature environments such as sediment. Goethite has been well known since ancient t ...
mineralisations. The potential yield of the two deposits is estimated at 2.25 billion tonnes of high-grade iron ore.


Corruption and controversy

The Simandou mine has known much turmoil and many mining rights disputes over the years. In 2008
Rio Tinto Group Rio Tinto Group is an Anglo-Australian Multinational corporation, multinational company that is the world's second-largest metals and mining corporation (behind BHP). The company was founded in 1873 when of a group of investors purchased a mine ...
, the licensee of the Simandou concession, was ordered by the Guinean government to relinquish the northern half (Blocks 1 and 2, east and southeast of
Kérouané Kérouané is a town located in southeastern Guinea. It is the capital of Kérouané Prefecture. As of 2014 it had a population of 36,355 people. Mining investment in the region is ongoing, funded through the Tigui Mining Group, owned by Tigui ...
) to BSGR (Beny Steinmetz Group Resources), a company controlled by the
Israeli Israeli may refer to: * Something of, from, or related to the State of Israel * Israelis, citizens or permanent residents of the State of Israel * Modern Hebrew, a language * ''Israeli'' (newspaper), published from 2006 to 2008 * Guni Israeli ...
diamond investor
Beny Steinmetz Beny Steinmetz ( he, בני שטיינמץ; born 2 April 1956) is an Israeli businessman and entrepreneur, with a focus in the mining and energy sectors, while being also active in the real estate and diamond-mining industries. Beny Steinmetz is ...
. In March 2010 Rio Tinto and its biggest shareholder,
Aluminum Corporation of China Limited Aluminum Corporation of China Limited (, known as Chalco), is a Chinese company listed in Hong Kong and in New York. A multinational aluminium company, its headquarters are in Beijing, People's Republic of China. It is the world's second-largest ...
(Chinalco), signed a preliminary agreement to develop Rio Tinto's iron ore project. On April 14, 2013, Frederic Cilins, an agent for Beny Steinmetz's company, was arrested in
Jacksonville, Florida Jacksonville is a city located on the Atlantic coast of northeast Florida, the most populous city proper in the state and is the largest city by area in the contiguous United States as of 2020. It is the seat of Duval County, with which the ...
, as a result of an
FBI The Federal Bureau of Investigation (FBI) is the domestic Intelligence agency, intelligence and Security agency, security service of the United States and its principal Federal law enforcement in the United States, federal law enforcement age ...
investigation that began in January 2013. The investigation aimed to establish whether potential illegal payments made to obtain mining concessions in Guinea had been transferred to the United States in breach of the
Foreign Corrupt Practices Act The Foreign Corrupt Practices Act of 1977 (FCPA) (, ''et seq.'') is a United States federal law that prohibits U.S. citizens and entities from bribing foreign government officials to benefit their business interests. The FCPA is applicable world ...
, which allows U.S. officials to pursue bribery cases abroad. Cilin's detention followed covert FBI recordings of a series of meetings that allegedly showed he had plotted the destruction of documents which it is claimed could have shown the Simandou exploitation rights were acquired following the payment of millions of dollars in bribes to Guinea government officials. Cilins pleaded guilty in March 2014 and was sentenced to 2 years in jail. No charges were brought against Steinmetz or BSGR. Back in 2010, BSGR sold 51% of their stake to
Vale A vale is a type of valley. Vale may also refer to: Places Georgia * Vale, Georgia, a town in the Samtskhe-Javakheti region Norway * Våle, a historic municipality Portugal * Vale (Santa Maria da Feira), a former civil parish in the municipali ...
(NYSE:VALE) for $2.5 billion. However, after Vale had paid in $500 million, the government of Guinea led by President
Alpha Condé Alpha Condé (N'Ko: ; born 4 March 1938) is a Guinean politician who served as the fourth president of Guinea from 2010 to 2021. Condé spent decades in opposition to a succession of regimes in Guinea, unsuccessfully running against President L ...
launched an investigation into the legality of BSGR's license. In April 2014 the Guinean government cancelled BSGR's mining rights in Simandou, and in May 2014 BSGR sought arbitration over the government's decision to expropriate the company's mining rights. During the same month Rio Tinto filed suit against Vale and BSGR over the validity of their mining license. BSGR denied any wrongdoing and the lawsuit was dismissed in 2015 in the US. In November 2016, BSGR filed suit against Rio Tinto for compensation. In 2014, Vale filed a claim against BSGR at the London Court of International Arbitration to recover an upfront payment to BSGR and money it invested in Guinea. The court decided in favor of Vale and awarded it $2 billion. In May 2020, BSGR filed discovery request documents at the court in New York based on transcripts of conversations with former Vale executives that were obtained by the
Black Cube Black Cube (BC Strategy Ltd) is a private intelligence agency based in London, Tel Aviv and Madrid, which drew widespread condemnation for its work surveilling and assisting with efforts to slander the reputations of women accusing Harvey Weinste ...
private intelligence company. BSGR claims that the documents prove that Vale was aware of potential problems with how the rights to develop Simandou had been obtained, but chose to ignore them and proceeded to buy 51% of the iron-ore licenses. This could undermine Vale’s claims to compensation. In February 2019, BSGR came to an agreement with
Guinea Guinea ( ),, fuf, 𞤘𞤭𞤲𞤫, italic=no, Gine, wo, Gine, nqo, ߖߌ߬ߣߍ߫, bm, Gine officially the Republic of Guinea (french: République de Guinée), is a coastal country in West Africa. It borders the Atlantic Ocean to the we ...
to withdraw the mutual corruption allegations as well as the
arbitration Arbitration is a form of alternative dispute resolution (ADR) that resolves disputes outside the judiciary courts. The dispute will be decided by one or more persons (the 'arbitrators', 'arbiters' or 'arbitral tribunal'), which renders the ' ...
case. The agreement made BSGR surrender its rights to Simandou but allowed it to maintain an interest in the smaller Zogota deposit while giving
Mick Davis Sir Michael Lawrence Davis (born 15 February 1958) is a British politician and former South African businessman, former Chief Executive and Treasurer of the Conservative Party and the chief executive (CEO) of Xstrata plc, an Anglo-Swiss multina ...
, the head of Niron Metals, permission to develop it. In 2016, former Guinean mining minister Mahmoud Thiam accused the head of Rio Tinto's Guinea operation department, Steven Din, of offering him a bribe in 2010 with the aim of regaining Rio Tinto's control over half of the undeveloped Simandou project. In November 2016, Rio Tinto admitted to paying $10.5 million to , a close adviser of President Alpha Condé, in 2011 to obtain rights on Simandou. During the same month the company agreed to sell their remaining 46.6% stake in the mine to
Aluminum Corporation of China Limited Aluminum Corporation of China Limited (, known as Chalco), is a Chinese company listed in Hong Kong and in New York. A multinational aluminium company, its headquarters are in Beijing, People's Republic of China. It is the world's second-largest ...
(Chinalco) for $1.3 billion. President Condé denied knowing about the bribe. However, according to recordings presented by
FRANCE 24 France 24 ( in French) is a French state-owned international news television network based in Paris. Its channels broadcast in French, English, Arabic, and Spanish and are aimed at the overseas market. Based in the Paris suburb of Issy-les-M ...
, Guinean authorities knew about the Simandou briberies by Rio Tinto. In 2017, the Serious Fraud Office (SFO), Britain's anti-fraud regulator, launched an official investigation into Rio Tinto's business and mining practices in Guinea. Investigations into the Group's activity in Simandou were also launched by Australian authorities and the
US Department of Justice The United States Department of Justice (DOJ), also known as the Justice Department, is a federal executive department of the United States government tasked with the enforcement of federal law and administration of justice in the United State ...
.


Production

Mining operations were expected to start before the end of 2015. Rio Tinto Limited plans to build a 650 km railway to transport iron ore from the mine to the coast, near
Matakong Matakong is an island just off the coast of Guinea between the capital Conakry and the Sierra Leone border. Nomenclature Matakong is also called Matakan. Transport Matakong is the proposed port terminus of the heavy duty standard gauge ...
, for export. Much of the Simandou iron ore is expected to be shipped to China for steel production. Despite assurances, the mine is still not operational. The mine is expected to produce up to 95 MTpa of ore.


See also

*
Mining industry of Guinea The mining industry of Guinea was developed during colonial rule. The minerals extracted consisted of iron, gold, diamond, and bauxite. Guinea ranks first in the world in bauxite reserves and 6th in the extraction of high-grade bauxite, the alumin ...


References

{{DEFAULTSORT:Simandou Mine Iron mines in Guinea