By Joe Bavier

CAPE TOWN - Guinea stands by its requirement that output from the long-delayed Simandou iron ore project must be exported from a Guinean port, despite the collapse of a deal aimed at jump-starting development, its mines minister said on Wednesday.

Simandou is one of the world’s biggest iron deposits, containing billions of tonnes of high-grade ore, but development has been complicated by its location far from the coast and the enormous $23 billion cost of the required infrastructure.

Allowing miners to ship ore via closer ports in neighbouring Liberia would reduce that cost.

“The project will be developed. We’re working on it,” Abdoulaye Magassouba said in an interview at the African Mining Indaba in Cape Town. “The trans-Guinean (railway) option is the only option we are considering.”

An outline deal for Rio Tinto to sell its 45.05 percent stake in the project to partner Aluminum Corp of China (Chinalco), which holds 39.95 percent, lapsed last year without producing an agreement.

Rio Tinto and Chinalco officials were not available to comment.

While Guinea’s iron ore ambitions have been stymied, its bauxite sector is booming.

It mined 60 million tonnes of bauxite last year and is aiming to leapfrog Australia and China to become the world’s leading producer of the aluminium ore.

After years of stagnation, the West African nation has roughly tripled output since 2015, largely on the back of demand from Chinese industry.

It produced some 50 million tonnes of the ore in 2017.

“We’re working on being the world’s top bauxite producer ... and later the alumina leader,” Magassouba said, referring to bauxite that is partly processed.

Societe Miniere de Boke (SMB), its largest exporter, is targeting production of 60 million tonnes on its own.

The consortium of Singapore shipping firm Winning International Group, the world’s top aluminium producer China Hongqiao and Guinea’s UMS International, has also pledged to build a facility to refine bauxite into alumina.

It’s one of nine bauxite refinery projects proposed by companies operating in Guinea as the government pushes to add value to its mineral exports, a separate ministry official said.

The Guinean authorities also signed a $20 billion resource-for-infrastructure deal with China last year.

“Our infrastructure needs require a large amount of finance,” Magassouba said. “The president and his government took the decision to dedicate part of our mining revenues to invest in priority infrastructure.”

Under the deal, Guinea has granted bauxite mining concessions to three Chinese companies - State Power Investment Corporation, Chinalco and China Henan International Cooperation Group.

Mining royalties will be used to repay a consortium of Chinese banks headed by ICBC for loans granted on a case-by-case basis for essential, non-mining infrastructure projects.

Two projects already underway include the improvement of roads in the capital Conakry and the rehabilitation of the main highway to the town of Dabola.