Guinea seeks developers for Simandu iron ore deposit

Simandou has over two billion tonnes of iron ore reserves and some of the highest grades in the industry (66% - 68% Fe, attracting premium prices).

Guinea has announced an international tender for Blocks 1 and 2 in Simandu, providing companies with information on its bids by August 2, as the country seeks to revive interest in the world's largest undeveloped iron ore deposit.

Guinea's ambition to develop Simandou has failed due to infrastructure costs and protracted legal disputes, but high iron ore prices and the resolution of some of the problems have increased the chances of developers being found.

Mines Minister Abdoulaye Magassuba told Reuters that the international tender will be "open, competitive and transparent." The deadline for companies to submit bids is August 2, and the process should be completed 30 days after that, a tender official said.

Government sources, speaking on condition of anonymity, said Western mining groups and companies from Asia, including China, have shown an interest in Simand, which is highly regarded.

High quality iron ore is in high demand and has become in demand in countries including China as its processing creates less pollution than lower grade iron ore.

Blocks 1 and 2 became available after the resolution of one of the court cases in which Shimandu was involved. Billionaire Beni Steinmetz's BSG Resources (BSGR) said it would move away from the Simandou project but would retain the right to develop the smaller Zogota mine.

The Guinean government has said that ore mined at Simanda must be shipped from its own ports, which poses a problem for potential developers as its location is 650 kilometers off the coast of Guinea.

An industry source said the Australian iron ore company Fortescue Metals was interested in the Simandu tender.

A Facebook page representing the office of Liberian President George Weah says Fortescue chairman Andrew Forrest was among a group of potential investors who signed a cooperation agreement on July 14 to improve rail transport in Liberia.

Fortescue Metals said it has not signed an iron ore agreement with Liberia.

Anglo-Australian miner Rio Tinto owns 45.05% of the remaining Simandou blocks 3 and 4, which he is trying to sell.

General transaction for the transfer of a share to a partner company Aluminum Corp. from China (Chinalco), which owns 39.95%, expired last year without a deal, with sources citing China's desire to control all four blocs as one obstacle.