Simandou

Next steps

In March 2023, negotiations towards the co-development of project infrastructure progressed with the signing of a shareholder agreement, subject to certain conditions and the resolution of identified outstanding issues, between Rio Tinto joint venture Simfer, Winning Consortium Simandou (WCS) and the Government of Guinea². The agreement establishes the governance and operations model for la Compagnie du TransGuinéen, and is another step towards securing the cost estimates, schedule, fiscal regime and regulatory authority approvals necessary to progress the co-development of rail and port facilities. We have also progressed upgrade works to camp facilities and other early works.

This paves the way to progress the definitive joint venture arrangements and secure necessary financing to construct more than 600 kilometres of rail infrastructure spanning the length of the country, as well as port infrastructure on the coast of the Forécariah prefecture in Guinea. Rio Tinto Simfer, WCS and the Government of the Republic of Guinea are committed to co-developing the rail and port infrastructure in line with internationally recognised environmental, social and governance standards.

Ownership of the new infrastructure joint-venture company will be split between development partners, Simfer Jersey Ltd and WCS, each at 42.5% equity share, with the Government of the Republic of Guinea taking a 15% free carry equity stake.

The Rio Tinto Simfer joint venture comprises Simfer S.A., which develops the mine and in which the Government of Guinea holds 15% and Simfer Jersey Limited holds 85%. In turn, Simfer Jersey Limited, which co-develops the infrastructure with WCS, is owned by Chalco Iron Ore Holdings (CIOH) (47%) and Rio Tinto (53%). CIOH is currently owned by Chinalco (75%), Baowu (20%), China Rail Construction Corporation (CRCC) (2.5%) and China Harbour Engineering Company (CHEC) (2.5%).

The incorporation of InfraCo with our partners underscores the importance of the Simandou resource in today's decarbonising world and its development will complement Rio Tinto's strong iron ore portfolio. It is also a very important moment for Guinea and for Guineans, for whom the project's southern infrastructure corridor has the potential to bring significant benefits for regional economic development by leveraging international project and ESG standards. We are most grateful to the Government of Guinea and WCS for their collaboration and look forward to making the promise of Simandou a reality.”

- Bold Baatar, Rio Tinto’s Executive Committee member in charge of the Simandou project

Our commitment to protecting biodiversity in Guinea

The region around Simandou contains unique and precious biodiversity, including endangered and critically endangered species such as Western Chimpanzees and Forest Elephants.

We are committed to constructing and operating the SimFer mine and infrastructure in line with internationally recognised standards which help to manage the risks and impacts of projects of this type on biodiversity, including endangered species.

At the core of this commitment is alignment with the International Finance Corporation (IFC)’s Performance Standard 6 (PS6) which focuses on biodiversity conservation and the sustainable management of living natural resources. It underscores the importance of protecting biodiversity, maintaining ecosystems and ecosystem services (meaning the ‘services’ such as clean water, oxygen production, and flood prevention that humans rely on), and promoting sustainable development. 

The IFC is part of the World Bank Group and aims to advance economic development around the world by reducing poverty and promoting sustainable development.

IFC’s Sustainability Framework, including its policies, guidelines and performance standards are widely recognised as the international standard for sustainability performance.

SimFer and the wider Simandou project are committed to operating in line with IFC Performance Standards.

Performance Standard 6 (PS6)

Key objectives of PS6 include:

• protecting and conserving biodiversity
• maintaining the benefits of ecosystem services
• promoting the sustainable management of living natural resources

PS6 provides guidelines for identifying and mitigating environmental risks associated with development projects, emphasising the need to assess impacts on natural and critical habitats and to implement a Mitigation Hierarchy: avoid, minimise, restore, and offset. It is considered best practice for biodiversity conservation across multiple sectors.

Our commitment to PS6 at the Simandou project

We have fully committed to aligning to IFC's PS6 to ensure responsible environmental stewardship. One of the core tenants of PS6 is the Mitigation Hierarchy.

The Mitigation Hierarchy and our approach

The Mitigation Hierarchy is a structured approach used to manage biodiversity and environmental risks associated with development projects. As a global leader in mining and metals, we have integrated the mitigation hierarchy into its approach to environmental impact at every stage of developing the SimFer mine and infrastructure. It consists of four key steps:

• Avoidance: preventing adverse impacts on biodiversity by selecting project locations and designs that avoid harm to sensitive ecosystems. In the case of Simandou, we have invested significantly in redesigning the SimFer mine so that it avoids critical chimpanzee habitat and protects biodiversity areas with an abundance of range restricted species (species which are unable to move far beyond their habitat).

• Minimisation: reducing the severity and extent of impacts that cannot be avoided through best environmental practices. At the SimFer mine, this includes measures such as building underpasses for animals to travel through, buffer zones and dust, light and noise suppression.

• Restoration/rehabilitation: repairing degraded ecosystems and restoring biodiversity in areas affected by project activities. Post-mining land rehabilitation programs at Simandou aim to restore ecosystems and support biodiversity regeneration, often in collaboration with conservation organisations. This will happen progressively throughout mine operations and at the point where the mine becomes non-operational.

• Offsetting: compensating for any residual, unavoidable impacts by implementing conservation projects that deliver measurable biodiversity gains elsewhere. In the case of Simandou, we have also committed as part of IFC PS6 to achieve a Net Gain for Critical Habitat Qualifying and Range Restricted species - meaning there will be a gain of biodiversity in these areas compared to when we began operations following the full implementation of the Mitigation Hierarchy. 

To achieve any Net Gain requires offsetting as described above and SimFer has embarked on an extensive offset programme in Guinea, with a broad swath of potential offset sites currently undergoing studies for their suitability since 2023.

In developing offsets, the involvement of the community is essential. We recognise the pivotal role of local communities and continue to engage as part of the studies to identify the economic opportunities that can be leveraged from the offsets while supporting environmental stewardship. 

Management of wider impact of the Simandou project

All of Simandou’s project partners are committed to working together implement PS6 and Rio Tinto and SimFer are engaged to support a whole-project approach which takes into account biodiversity impacts across both Simandou mines and the infrastructure currently being constructed by WCS. This work is continuing.

Further details

SimFer has published an Environmental and Social Impact Assessment (ESIA) for its mine and rail infrastructure which was updated in April 2024. This contains detailed information on SimFer’s impacts and how it will manage them in line with PF6.

Working with our communities

By its very nature, mining and processing disturbs the environment and can impact surrounding communities. Yet it delivers significant economic and social benefits, yielding materials needed for the energy transition and demands of increasing urbanisation. It also creates local employment; small business development; tax and royalty streams; and training, skills, and community development.

Our teams – ranging from archaeologists and economic development experts to human rights specialists and our operational leaders – work closely with communities to understand how our work affects their lives, their culture and their heritage. By doing so, we can respond to community concerns, optimise benefits and work to minimise negative impacts.

Throughout the history of our involvement in the Simandou project, we have maintained regular community consultation forums and sessions designed to maintain dialogue with local communities by addressing questions, concerns and additional opportunities to provide support. This work continues actively as we progress through to the forthcoming phases of construction and operation.

During our Social and Environmental Impact Assessment (SEIA), completed in 2012 and currently under review, we consulted more than 10,000 people. To deliver on our commitment to community development, we then made US$500,000 annual contributions to community development throughout the project’s care and maintenance period from 2016 to 2020.

Initiatives this funding has supported have included learning and basic literacy training for local tradesmen (carpenters, masons), support for agricultural and livestock projects, market gardening cooperative development, as well as the modern butchery initiative to encourage procurement from local livestock herders and meat producers.

With a grant of US$2 million over 3 years, we are also continuing to invest in vocational training to help establish women-led businesses in the community.