CONAKRY (Reuters) - Anglo-Australian mining giant Rio Tinto (L:RIO) has submitted feasibility studies to the Guinean government for its massive Simandou project, considered the world's biggest untapped iron ore deposit.
The studies are a further step toward bringing onstream a deposit that holds more than 2 billion tonnes. The real cost of the project has yet to be revealed but it is tipped to reach $20 billion.
It could make Guinea one of the world's top iron ore exporters, but analysts caution the world already has a surplus of iron ore for the foreseeable future.
Rio Tinto's joint venture Simfer said in a statement on Monday it had submitted the bankable feasibility study of the mine and the infrastructure of the Simandou South Project on the basis of extensive analysis over the last two years.
Simfer is a joint venture owned by the government of Guinea (7.5 percent), Rio Tinto (46.6 percent), Chalco Iron Ore Holdings - a consortium of Chinese state-owned firms led by the Aluminium Corporation of China (41.3 percent) - and the International Finance Corporation (4.6 percent), part of the World Bank.
When fully operational, Simandou has the potential to double Guinea’s GDP, the project partners have said, while China, the world's largest iron ore consumer provides an obvious market.