What’s new: The world’s largest steel producer, China Baowu Steel Group Corp. Ltd., has officially inked a deal with a Chinese-backed consortium to develop part of the massive West African Simandou mine, the state-owned steel giant announced Wednesday.
Under the agreement, Baowu subsidiary Baowu Resources Co. Ltd. and Winning Consortium Simandou (WCS) will work together to develop blocks 1 and 2 in the northern part of the Simandou project in Guinea.
WCS is established by Singapore-based Winning International Group, Chinese private aluminum producer Shandong Weiqiao Aluminum & Power Co. Ltd. and Guinean firm United Mining Suppliers International.
In a separate statement announcing the deal, Winning International said that WCS has employed about 10,000 workers in Guinea to develop infrastructure for the project.
The background: The Simandou mine is the world’s largest untapped deposit of high-grade iron ore, with an estimated annual production capacity of 120 million tons of iron ore initially, according to Baowu.
China, the world’s largest consumer of iron ore, views the mine as key to reducing its dependence on suppliers in Australia.
The mining rights of Simandou are divided into four blocks. WCS controls blocks 1 and 2 in the northern part of the project, while the remaining two blocks in the south are held by London-based mining giant Rio Tinto PLC and a group of Chinese investors led by state-owned aluminum giant Aluminum Corp. of China. The Guinean government holds 15% in each of the two parts.
Contact reporter Ding Yi (yiding@caixin.com) and editor Bertrand Teo (bertrandteo@caixin.com)
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