Simandou: The African mine that could shake Australia and reshape China’s rise

Could a single iron-ore deposit in Guinea reshape global markets and Africa-China economic ties? The Simandou complex suggests it can. 

With estimated reserves of at least three billion tonnes, it is the world’s largest untapped high-grade iron-ore deposit and Africa’s largest greenfield integrated mine and infrastructure project. This US$23 billion project combines mining with infrastructure, including a 600-kilometre railway connecting inland deposits to the deep-water port of Morebaya, enabling bulk shipping and regional connectivity at an unprecedented scale.

The launch on 11 November marked a historic milestone for Guinea. Underscoring the project’s domestic and regional significance and international strategic weight, the launch was attended by the country’s leader, General Mamady Doumbouya, Chinese Vice-Premier Liu Guozhong, Rwandan President Paul Kagame and other African leaders. Doumbouya declared the day a public holiday, reflecting the project’s domestic and strategic weight. 

The first cargo has already departed in November on a 45-day voyage to China, marking the mining project’s immediate significance for global supply chains.

Iron ore, the backbone of modern infrastructure and manufacturing, is the world’s second most traded commodity after oil. Production is dominated by Australia, which exported 866 million tonnes — more than half of global trade — in 2024. Brazil, China, India and Russia are also major producers. A handful of companies — BHP, Fortescue, Hancock Prospecting, Rio Tinto and Brazil’s Vale — account for 75% to 80% of annual exports, of which China consumes roughly an enormous 75% of total global imports. 

China’s demand is driven by construction, urbanisation, machinery, green technologies and the production of about half the world’s steel. In 2024, China’s iron ore imports rose to a 1.24 billion metric tons — a 4.9% year-on-year increase — a record high for a second year. 

Other major consumers include India, Japan and South Korea. 

First explored in the 1950s under French colonial rule, Simandou deposit’s development was repeatedly delayed by political instability, coups, corruption and legal disputes. By the late 2010s, a consortium of Chinese and Singaporean firms revived the project, among others.

The project comprises four mining blocks, two of which are being developed by Singapore-Chinese group Winning Consortium Simandou (WCS), while the remaining two are managed by Simfer, a joint venture between Rio Tinto, Chalco Iron Ore Holdings and the Guinean government. China Baowu Steel Group holds stakes in WCS and indirect ownership in Simfer, reflecting the mine’s integration with China’s industrial and steel-sector strategy.

At full capacity, Simandou is expected to produce around 120 million metric tons of high-grade ore annually, equivalent to around 7.5% of global seaborne trade and nearly 10% of China’s 2024 imports. Doing so will also position it as the world’s fifth largest producer. 

With ore grading 65% iron, the project targets the premium segment crucial for green steel production. Hu Wangming, chair of Baowu, called the launch “a significant milestone in the global mining industry”, highlighting both its technical and strategic significance. 

The new mining complex carries significant implications. With Chinese firms holding 75% of the project, it is set to become the world’s largest source of high-grade ore — essential for China’s low-carbon steel ambitions and broader decarbonisation efforts. Its premium “green ore” reduces energy requirements in steelmaking, a sector responsible for 7% to 8% of global anthropogenic greenhouse gas emissions. By connecting Africa’s mineral resources to global energy transitions, the mine positions Guinea, China and the region at the heart of emerging green industrial value chains.

Expectations are high. For Guinea, the mine is expected to generate thousands of jobs, expand rail and port infrastructure, encourage export diversification, and even position the country as a regional logistics hub. The mine’s projected output is set to make Guinea into Africa’s second largest exporter of minerals and metals by value.

The project also reflects the strengthening of Africa-China trade. Bilateral trade and investment have surged in mining, energy and infrastructure, reaching US$296 billion in 2024 — 22% of Africa’s total trade. Guinea is central to this dynamic: bilateral trade reached US$9.05 billion in 2023, up 34.2% from the previous year, with China exporting US$2.65 billion and importing US$6.41 billion. 

Vice-Premier Liu Guozhong described Simandou as the culmination of “nearly 70 years of friendship and cooperation”, underscoring its strategic weight in China-Guinea ties and broader Africa-China engagement. Doing so helps China deepen Guinea’s presence and influence across West Africa while also reinforcing Beijing’s role as a key development and infrastructure partner for Africa. 

There are implications for pricing too. The entry of Simandou’s high-grade ore into the global market could depress prices, putting pressure on higher-cost producers in Australia and Brazil in particular. Competitors may need to enhance ore quality, adjust production strategies, or negotiate long-term supply contracts in response to China’s expanding influence.

Alarm bells are already ringing in Australia, which supplies around 40% of global iron ore and depends heavily on it for export revenue. Local media have already dubbed Simandou the “Pilbara Killer”, reflecting concerns about the potential impact on Western Australia’s mines. Analyses from the 2016-2017 Australian parliamentary budget review indicate that even a US$10 per tonne price increase/reduction could shift nominal GDP by over A$6 billion (US$3.9 billion), highlighting the economic stakes.

These pressures have reached the political sphere. In response, in July this year, Prime Minister Anthony Albanese emphasised opportunities for cooperation on green iron — a low-carbon steel input produced using renewable energy — during his visit to China. By targeting this emerging market, Australia could transform traditional iron ore exports into strategically and environmentally valuable products and double revenue to more than A$250 billion. The visit also led to the creation of a Policy Dialogue on Steel Decarbonisation, aimed at fostering bilateral collaboration on low-emission steel production and advancing the broader green industrial transition.

Challenges loom large. The project’s vast infrastructure requires rigorous maintenance, security and long-term financing. 

For Beijing, disruptions from extreme weather, equipment failures, political instability, logistical delays or local unrest could quickly ripple across global supply chains, affecting both output and market stability. 

Meanwhile, heavy reliance on a single buyer — China — amplifies the need for robust governance to manage dependency risks. Failure to address these issues could spark social unrest and deter future investment.

Governance remains a critical concern. Guinea’s history of political volatility, corruption and weak institutions has repeatedly hampered resource projects. Transparent revenue management, equitable community engagement and strong oversight mechanisms are essential to prevent elite capture and ensure that the mine delivers broad-based development benefits. 

Cracks are already visible: in September, Guinean authorities reportedly turned back a shipment of 18 Chinese-built locomotives intended for the WCS, citing a co-development agreement that requires all locomotives for the TransGuinean Railway to be sourced exclusively from US-based Wabtec Corporation.

Geopolitically, the stakes are high too. Beijing’s growing control over African critical minerals draws scrutiny, particularly from the US, which is actively promoting “friend-shoring” to reduce reliance on Chinese-linked supply chains. As Washington seeks alternative sources for minerals vital to clean energy and advanced manufacturing, China’s deepening presence in West Africa through projects like Simandou may directly challenge US strategic objectives, underscoring the intersection of industrial policy, resource security and global geopolitics.

Simandou’s emergence as a new centre of high-grade iron ore signals a profound shift in global supply chains, Africa-China relations and Guinea-China relations. By anchoring China’s green-steel ambitions and economic opportunities for Guinea, the project carries both (geo)economic promise and geopolitical weight. 

How its opportunities and risks are navigated will determine whether the new mining complex becomes a catalyst for shared growth or a new fault line in global competition.

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