Cover Story: How China Unlocked Simandou to Reshape the Global Iron Ore Trade

By Luo Guoping, Bao Zhiming and Denise Jia

On an October morning along the Atlantic coast of West Africa, a bulk carrier named Winning Youth waited quietly in the port of Morebaya. It carried nearly 10,000 metric tons of blood-red earth, freshly extracted from deep inside Guinea’s remote southeastern mountains. The iron ore, loaded days earlier on to the first train to run on the Trans-Guinea Railway, had traveled hundreds of kilometers across ridges to reach this point. Soon it would begin an 11,000-nautical-mile voyage around the Cape of Good Hope, across the Indian Ocean, through the Strait of Malacca and into the South China Sea. Its final destination: a steel mill in China.

This was no ordinary commodity shipment. It marked the long-awaited commercial debut of Simandou, the world’s largest untapped high-grade iron ore deposit — often called the “caviar of iron ore.”

After nearly three decades of false starts, international disputes and collapsed contracts, one of the most coveted mineral assets on Earth was finally moving to market. And in doing so, it may reshape the balance of the $160 billion global iron ore trade.

On Nov. 11, Guinea’s transitional government marked the event with a prestigious celebration at Morebaya. China’s Vice Premier Liu Guozhong flew in as President Xi Jinping’s special envoy. African leaders from Rwanda, Gabon and Côte d’Ivoire stood alongside senior executives from Rio Tinto Group, China Baowu Steel Group Corp., Aluminum Corp. of China Ltd. (Chinalco), Shandong Weiqiao Pioneering Group Ltd. and Singapore’s Winning International Group. In a nation in which the average income hovers around $1,700 a year, the symbolism of a $20 billion project — virtually the equivalent to Guinea’s annual GDP — was striking.

The Blocks 1 and 2 zone of Simandou in Guinea.

For Guinea, Simandou is more than a mine. It is a geopolitical statement, a development experiment, and a test of whether infrastructure-led mining projects can deliver long-term prosperity to resource-rich but economically fragile nations. The mine’s projected output — up to 120 million tons a year — would make Guinea the world’s fifth-largest iron ore exporter, behind only Australia, Brazil, China and India. The ore, with a 65% iron content, is prized for its low impurities and suitability for low-carbon steelmaking, a crucial advantage as environmental pressure on the steel industry intensifies.

But the implications stretch far beyond West Africa. For China, which imports more than 70% of its iron ore from Australia and Brazil, Simandou offers a strategic alternative. As tensions with Canberra flare up and global supply chains grow more fragile, Beijing has moved aggressively to secure upstream resources through its “Cornerstone Plan,” a push to diversify supply and reduce exposure to foreign pricing power. With major stakes in Simandou held by Chinese state-owned giants, the project is increasingly seen as a pillar of long-term resource security.

The road to this moment was anything but smooth. Discovered by Rio Tinto in 1997, the Simandou range sat undeveloped for more than two decades as developers struggled with infrastructure costs, corruption scandals, legal challenges and political instability. It ultimately took an unusual alignment of timing, diplomacy and deep, multi-sector collaboration among Chinese mining, steel, shipping and financial interests to unlock the project.

At the heart of the effort lies a new 600-kilometer heavy-haul railway, built largely by Chinese engineering firms and funded with Chinese credit. It connects the mine directly to the coast and, from there, to China’s industrial heartland. Its completion is both a technical feat and a strategic play — one that could alter not only global ore flows but also China’s negotiating leverage in a market long dominated by a handful of multinational players.

A freight train carrying iron ore from Simandou on the Trans-Guinean Railway. Photo: Yang Wenchao

For the global mining world, Simandou is now impossible to ignore. While full production isn’t expected until 2028, its emergence is already influencing forecasts, futures markets and corporate planning. And in an era where supply chains function as geopolitical tools, the arrival of this West African giant may prove to be one of the most consequential developments in modern resource politics.

 

Anatomy of a mega mine

Deep in southeastern Guinea, the 110-kilometer Simandou mountain range is being carved into two massive mining zones — Blocks 1 and 2 in the north, and Blocks 3 and 4 in the south — each designed to produce 60 million tons of high-grade iron ore each year. Though developed separately, both rely on the same backbone: the 600-kilometer Trans-Guinean Railway and the twin berths of Morebaya Port, financed by northern and southern partners.

Infrastructure commands the bulk of the project’s roughly $20 billion cost. More than $9 billion has gone into the railway and another $4 billion into two mineral berths. In total, ports, rail, barges and offshore loading systems account for more than two-thirds of the budget — a scale unmatched in African mining.

Yet investment between the two zones has differed sharply. According to sources familiar with the matter, the Chinese-led northern development — headed by Winning Consortium Simandou (WCS) — has spent roughly half as much on mine construction as Rio Tinto, leading the SimFer partnership operating Blocks 3 and 4, has invested nearly $5 billion in the mine following years of feasibility studies, cost overruns and logistical hurdles.

SimFer Jersey, the joint venture controlling the southern project, is 85% owned by corporate shareholders and 15% by the Guinean state. Within SimFer, Rio Tinto holds a controlling 53% stake, while the Chinese consortium known as CIOH — led by Chinalco (75%) and joined by Baowu, China Railway Construction Corp., and China Harbour Engineering Co. Ltd. — controls the remaining 47%. Chinalco, notably, plays a dual role: not only is it Rio Tinto’s largest single shareholder, with more than 14% of voting stock, but it also spearheaded China’s entry into Simandou’s southern blocks back in 2010, with a $1.35 billion investment.

SimFer’s employees at a morning flag-raising ceremony at Simandou in October 2022.

The northern zone has had a far more turbulent history. Originally awarded to Rio Tinto in the late 1990s, the rights to Blocks 1 and 2 were revoked in 2008 by the Guinean government over alleged inactivity and transferred to Israeli firm BSGR — whose tenure later collapsed in a corruption scandal. In 2019, the rights were re-awarded to WCS, an alliance of Singapore-based shipper Winning International and the Chinese giant Weiqiao Aluminum. The Guinean government retained its 15% stake.

The entry of WCS — and its deep ties to Chinese infrastructure capital — marked a turning point. The consortium later brought in Baowu as a 49% partner in its mining and infrastructure subsidiaries, aligning China’s state-backed steel interests across both halves of Simandou. Over the next six years, despite monsoon rains, logistical challenges and delays due to the Covid pandemic, construction proceeded at a pace few had anticipated.

Infrastructure became the breakthrough. SimFer invested $3 billion for a 34% stake in the Trans-Guinean Railway, which ultimately cost $8.8 billion — $1 billion below early estimates — and can transport 220 million tons of ore each year. Port capacity is split: WCS’s berth can handle 70 million tons, while SimFer’s specialized transfer ship-equipped berth handles 60 million tons, with ore moving by rail, downriver barges and floating transfer units on to large bulk carriers.

To ensure balance, all shared assets are owned by Compagnie du Transguinéen (CTG), with SimFer and WCS each holding 42.5% and the Guinean government 15%. All railway and port assets revert to Guinea after 35 years, though operators retain usage rights — a structure seen as essential for transparency and stability.

SimFer’s southern mine and infrastructure require a total initial investment of $11.6 billion, split between Rio Tinto and its Chinese partners. Between 2023 and June 2025, Rio has poured in $3.1 billion; CIOH has contributed $2.6 billion. In the north, Weiqiao pledged $1.78 billion in credit support as of March 2024. Baowu plans to spend a total of $6 billion across the project, including $1.5 billion for the southern blocks, backed in part by a $1.4 billion Belt and Road green bond.

High commodity prices have made the investment more palatable. Rio Tinto posted $23.3 billion in EBITDA in 2024; China Hongqiao Group Ltd., Weiqiao’s listed aluminum platform, saw EBITDA soar nearly 70% to 44.5 billion yuan ($6.33 billion); and Chinalco more than 61 billion yuan. Even Baowu, despite sector headwinds, reported nearly 76 billion yuan in EBITDA. For all parties, Simandou is not just an iron ore investment — it is a long-term play to reshape global supply chains and reducing China’s dependence on Australia and Brazil.

The first batch of 78 locomotives ordered by SimFer on behalf of CTG arrived at the port of Morebaya in September 2025.

The catalyst named Winning

For more than two decades, the Simandou project stagnated amid regime changes, legal disputes and prohibitive infrastructure costs. Since the first Build-Operate-Transfer agreement was signed in 2002, the deal had been renegotiated repeatedly, with each revision raising new uncertainties. Then, in late 2019, WCS won the bid for the northern half of the mine — a moment that, as one early participant said, “reset the entire board.”

WCS wasn’t just another corporate entrant. It represented a new development model, shaped by years of trial-and-error in Guinea’s booming bauxite sector. Several industry insiders credit the revival of Simandou to a single fact: by the late 2010s, Chinese companies had quietly mastered the end-to-end playbook for building ports, railways and bulk-handling systems in West Africa. They were no longer merely resource buyers — they had become full-stack infrastructure builders.

At the center of this shift is Sun Xiushun, chairman of Winning International and now the de facto project commander for Simandou. Born in 1964 in Shandong, Sun began his career as a merchant sailor. In the early 2000s, he moved into freight shipping and founded Winning International in Singapore in 2006 to transport Indonesian bauxite to China. When Indonesia restricted exports in 2013, Sun sought new sources and arrived in Guinea — home to the world’s largest bauxite reserves, estimated at 7.4 billion tons in 2024 by the U.S. Geological Survey.

By 2014, Sun had stitched together the “Boké Winning Consortium,” a coalition of four firms from three countries: Winning International, China’s Weiqiao Group, Yantai Port, and Guinea’s UMS. Together, they built a seamless maritime supply chain from Guinea to Chinese ports, delivering the first 180,000-ton bauxite shipment in November 2015 — the beginning of a logistics revolution.

In 2019, the Boké group launched the 125-kilometer Dapilon–Santou railway — a bauxite-dedicated line that weathered Covid-19 disruptions and commodity volatility to open on schedule in June 2021. It became Guinea’s first modern railway, breaking decades of dominance by European and Russian operators. The project was built with $1.2 billion in private capital, with no major global miner involved.

Sun’s next move was even more ambitious. With his fleet delivering bauxite to China, Winning began maximizing return voyages by loading miscellaneous bulk goods — cement, steel, construction equipment — for the trip back to Africa. Simultaneously, the company expanded port operations, building two inland river ports in Boké and developing the Port of Dapilon with floating transfer systems, using minimal upfront capital to “mine in order to build more mines.”

The results were transformative. The Boké consortium became Guinea’s largest bauxite producer. In 2024, the country exported 130 million tons — nearly 30% of global supply and around 75% of seaborne trade. Nearly 70% of China’s bauxite imports now comes from Guinea.

China’s state-owned giants took notice. Chinalco launched a $706 million bauxite project in Boffa in 2018, building a conveyor system that would later be replicated at Simandou.

By 2020, the Guinean government formally signed a development agreement with WCS for Simandou Blocks 1 and 2. WCS moved quickly — conducting geological surveys, laying foundations at Morebaya Port and shifting construction crews from the completed Dapilon line to Simandou. In March 2021, excavation began for the Kindia Tunnel, a key artery in the Trans-Guinean Railway. At its peak, more than10,000 workers labored across simultaneous work sites. Then, in mid-2022, the government hit pause.

WCS had already invested more than $1.2 billion. “Without outside capital, we would’ve struggled to keep going,” Sun recalled in a 2025 interview with NUS Business School. “We ramped up bauxite production to fund Simandou — one mine paid for the other.” Behind the scenes, WCS was courting Chinese steelmakers and state-backed financiers to share the burden. “By the time they’d spent over a billion dollars, people started to believe,” said one person close to the talks.

WCS’s effectiveness stemmed from its willingness to act before conditions were ideal. A recent white paper described it as a “forced maturity” model — launch first, solve later. While international majors demanded fully exhaustive feasibility studies, WCS treated the process as iterative, demonstrating that lighter port infrastructure could be viable, risks manageable, and Guinea’s long-idle ore movable.

Local conditions demanded improvisation. Guinea’s coastline is shallow and silty, with high dredging costs and turbulent monsoon seasons. A true deepwater port would cost an estimated $6 billion to build, according to internal Rio Tinto assessments. WCS’s floating barge system cut capital costs by $4 billion but raised operating expenses by about $5 per ton. Each floating transfer unit can offload 5,000 tons per hour, yet filling a Very Large Ore Carrier (VLOC) still requires roughly 56 hours. The system is also vulnerable to weather: high waves during the rainy season regularly disrupt loading, dragging down efficiency.

 

Negotiating the impossible

When Colonel Mamady Doumbouya seized power in a bloodless coup on Sept. 5, 2021, few in the mining world expected his transitional government to become the driving force behind one of the most complex infrastructure negotiations in West African history. Yet from the moment the new regime took office, reviving Simandou became a top priority — not just as a mining project, but as a means to unite fragmented stakeholders around a national development vision. Within weeks, the government began pushing for joint infrastructure development between the mine’s northern and southern operators. Then made a surprise move: it hit the brakes.

Twice between 2021 and 2022, the government suspended the project — not to derail, but to force a comprehensive renegotiation. “Their priority,” explained Bernard-Bey Sanchez, former chief economist for Rio Tinto’s Simandou unit, “was to maximize the infrastructure’s potential for the country.” That meant ensuring equal access for both northern and southern blocks, integrating freight and passenger services into the railway, and embedding the state’s interests firmly into CTG, the joint venture tasked managing rail and port operations. Guinea, once a French colony, had long experience managing foreign capital — and wasn’t afraid to use leverage.

Under pressure from both the Guinean government and WCS’s rapid mobilization in the north, Rio Tinto finally came to the table in early 2022. After years of hesitation, the company realized that infrastructure costs — its chief concern — could now be shared. Over the next 30 months, the parties engaged in marathon negotiations, trading clauses through all-night meetings and countless document rewrites. “Overnight sessions were the norm,” said several persons close to the talks.

The stakes were enormous. Simandou wasn’t just a mine — it was a continent-spanning enterprise with sweeping technical and social and environmental implications: biodiversity corridors, chimpanzee habitat preservation, resettlements, multi-billion-dollar port, rail, and mine contracts. Each stakeholder had different priorities: WCS wanted security for its mining rights and uninterrupted maritime logistics; Baowu sought greater ownership of iron ore assets; Rio Tinto demanded fair, open access to the rail system; and the Guinean state needed jobs, local content and economic stability. “So much money was already in the ground,” one participant told Caixin, “A balance had to be struck. Eventually, everyone’s interests aligned.”

The result was an avalanche of paperwork. “If you stretched out all the agreements,” one participant joked, “they’d circle the equator.” But by spring 2022, key breakthroughs emerged.

On March 25, Guinea, WCS, and SimFer signed a tripartite framework agreement to form CTG. In July, they incorporated the infrastructure company and began drafting its governance. Dozens of executives and lawyers flew to Conakry to refine terms, construction protocols and cost-sharing mechanisms.

In September 2022, Baowu entered the picture, signing a strategic cooperation term sheet with WCS for the northern blocks. In December, the major players — including Baowu, WCS, SimFer and the Guinean state — met in Conakry to sign a binding infrastructure term outlining ownership stakes, funding triggers, local employment rules and operational controls. In March 2023, the CTG shareholder agreement was finalized, confirming the government’s 15% non-dilutable stake and defining the long-term operating model. With this, Simandou was cleared to restart.

Momentum accelerated. In August 2023, the co-development convention for the railway and port infrastructure was signed, aligning SimFer and WCS on construction scope and timelines. Mining agreements were revised accordingly. In February 2024, the transitional government passed enabling legislation to formalize the agreements. By July, after countless revisions and regulatory reviews, the infrastructure joint venture was fully executed. “It drained us — financially and emotionally,” Sun later recalled. “But we made it.”

The deal’s legal complexity drew international acclaim. Over a dozen law firms worked across China, Guinea, Singapore and the UK. In 2024, China Business Law Journal named Simandou one of the year’s Outstanding Deals, citing its intricate structure, cross-border financing and ability to navigate political uncertainty and legacy disputes. The publication called Simandou a “template for large-scale multinational projects in politically sensitive markets.”

The power of China speed

When the first iron ore shipment rolled out of Simandou in 2025 — on time, and in greater-than-expected volume — it stunned the global mining industry. Skeptics had long cited Guinea’s political volatility, financing gaps and environmental sensitivities as insurmountable obstacles. Yet the $20 billion megaproject — spanning 600 kilometers of railway, a new Atlantic port, multiple tunnels and bridges, and a twin set of mines — not only met its deadline, it surpassed it. “It moved at flying speed,” said one industry analyst. “The construction efficiency was off the charts.”

According to Chinese officials and executives, this was no accident—it reflected what they call “China Speed.” Built almost entirely by Chinese contractors, Simandou’s infrastructure has become a showcase of China’s industrial machine: rapid mobilization, vertically integrated supply chains, and coordinated execution across dozens of firms. “Once funding and objectives are clear,” one executive said, “our system moves fast—and moves as one.”

Nearly every component used Chinese engineering standards, materials, and labor. More than 30 Chinese firms worked on the northern blocks alone, among them China Railway Group, China Railway Construction Corp., Power Construction Corp. of China, China Communications Construction Co., and subsidiaries of Baowu and Chinalco. In total, Chinese companies secured more than 220 billion yuan in contracts.

The Kindia Tunnel—now the longest in West Africa—was one of the most challenging undertakings. Built by China Railway 18th Bureau Group, the 11.6-kilometer tunnel cut through unstable terrain and endured brutal weather, with 10 of the 15 excavation months falling in the rainy season. To compensate, crews doubled operations in dry months and worked around the clock, living in forest camps and eating instant noodles during peak periods.

The broader Trans-Guinean Railway—crossing four provinces and dozens of rivers—required 80 kilometers of bridges and 70 million cubic meters of earthworks. Multiple segments were built simultaneously and coordinated through real-time systems that adjusted for rainfall, labor availability, and equipment flows.

Chinese firms didn’t just build the system—they delivered it. Winning International coordinated 94 shipping runs over 27 months, transporting 156,000 tons of steel rails from Anshan Iron & Steel Group. The company ordered more than 10 Very Large Ore Carriers from Chinese shipyards—325,000-ton giants set to begin operations in 2026–27. By mid-2025, Winning operated a maritime fleet of more than 100 vessels, with an annual throughput capacity of 60 million tons. Controlling shipping, procurement, and timelines shaved an estimated $1.5 billion off project costs.

Even industry veterans took notice. “Our understanding of China’s development capacity has completely changed,” Rio Tinto CEO Simon Trott told Chinese media in 2025. “This isn’t just speed—it’s deep coordination across supply chains, engineering, logistics, and capital.”

Simandou 2040: a national vision

In Conakry, new billboards reading “Simandou 2040 — La Route vers la Prospérité” have begun to appear. The slogan, introduced by President Doumbouya in May 2024, reflects an ambitious national vision: to turn Simandou from a mining venture into the backbone of long-term economic transformation.

Guinea’s economy remains heavily dependent on raw mineral exports. Mining accounts for more than 21% of GDP and over 90% of exports, mainly unprocessed bauxite. In Harvard’s Economic Complexity Index, Guinea ranks 143rd out of 145 countries. But Simandou’s launch has begun shifting perceptions. In September 2025, S&P Global Ratings upgraded Guinea’s sovereign credit rating to B+/B—the highest since independence—citing Simandou as a “turning point,” with projected GDP growth of 9.5% annually from 2026 to 2028.

Doumbouya has capitalized on the momentum. With presidential elections set for Dec. 28, 2025, he announced his candidacy in early November. The urgency to ship ore before year-end—under threat of monthly penalties of $5–$15 million—was both political and contractual. His administration has outlined three successive five-year plans centered on infrastructure, services, agriculture, energy, and industry, all anchored in Simandou-driven revenues.

Still, obstacles loom. Guinea seeks more than ore exports; it wants local value creation. Following a model adopted by resource-rich nations like Indonesia, the government has mandated studies for steel and pelletizing plants within two years of first exports. Under the Co-Development Convention, SimFer and WCS must build either a 500,000-ton steel plant or a 2-million-ton pellet plant by 2036. But industrialization faces major challenges: unreliable power grids, limited domestic demand, and persistent infrastructure gaps.

Labor unrest is another risk. “Strikes are normal here,” one local resident told Caixin. In one infamous incident at a Russian aluminum plant, molten metal solidified inside pipes during a strike, destroying equipment. Despite such risks, investors see a long-term payoff. “Africa is still poor,” Sun has said, “but by 2030 its population will double to 3 billion. That’s when real growth begins.”

Localization is central to the project. While senior engineers largely come from China or Rio Tinto, most labor—particularly in construction—is local. By mid-2025, Simandou had created nearly 60,000 direct jobs and another 100,000 indirect ones. “If you manage local employees and communities well,” Sun said, “that’s 95% of the battle.”

Simandou’s global impact is only beginning to unfold. Analysts call it the “third pole” of iron ore supply, after Australia and Brazil; some dub it “the Pilbara Killer.” Yet reality is more nuanced. Simandou’s costs are higher due to its long rail haul and 45-day voyage to China. Though the ore is shallow and high grade, the massive infrastructure lifts break-even costs above industry norms.

Rio Tinto estimates total costs—mining, rail, and port—at about $28 per ton. Shipping adds $20–$30 per ton, depending on weather and logistics. Even with Winning’s new VLOC fleet, Simandou’s delivered cost to China remains above Brazilian and Australian benchmarks. But as volumes grow and logistics scale, delivered cost could fall to $60–$80 per ton—enough to pressure higher-cost producers elsewhere.

Simandou is already reshaping maritime logistics. At full output (120 million tons annually), it could require 150 additional Capesize bulk carriers. Chinese shipowners have moved swiftly: since 2023, they have ordered 76 of the 181 Capesize vessels under global construction. Cosco Shipping and China Merchants Steam Navigation are major buyers. Insiders say Simandou has finally given Chinese carriers leverage in a market long dominated by foreign freight clients. “For the first time,” said a source at the Shanghai Shipping Exchange, “Chinese carriers control the cargo—not just the ships.”

caixinglobal.com is the English-language online news portal of Chinese financial and business news media group Caixin. Global Neighbours is authorized to reprint this article.

Contact reporter Denise Jia (huijuanjia@caixin.com)

Foto: Adobe Stock, Michael Turner/Wirestock