Africa, a continent rich in natural resources, continues to attract the attention of international investors thanks to its vast deposits of precious minerals. Among these treasures, iron ore occupies a pride of place, with abundant reserves across the continent. There Guineain particular, stands out for its exceptional potential, home to the Simandou deposit, one of the largest unexploited iron ore deposits in the world.
Recently, Guinea’s economic landscape has experienced a significant turning point with the arrival of China Baowu Steel Group, the world’s largest steel producer. This industry giant has acquired a stake in two of the four blocks of the Simandou deposit, owned by Winning Consortium Simandou (WCS). This initiative marks a notable strengthening of Baowu’s commitment to this major project.
The history of this acquisition dates back to 2022 when Baowu first expressed interest in Simandou. The partnership agreement signed in September 2023 with WCS aims to accelerate the development of the deposit. In January 2024, the Chinese firm raised an impressive 10 billion yuan (approximately $1.4 billion), a large part of which is intended for the exploitation of Simandou.
The economic impact of this project on Guinea is indisputable. According to a recent study by the International Monetary Fund (IMF)the exploitation of Simandou could increase Guinea’s GDP by 26% by 2030. In addition, the start of production of the site in 2025 should lead to an appreciation of the Guinean currency of 3% in the same year and 2% in 2030.
The other Simandou blocks belong to a competing consortium, which also includes Chinese players and is led by the Australian mining giant Rio Tinto. Despite multiple delays, the end of construction work on the infrastructure necessary for exploiting the deposit is scheduled for 2025, with the first tonnes of ore expected to be placed on the market the following year.
This development constitutes a major chapter in the economic history of Guinea and could redefine regional dynamics. Baowu’s strengthened presence in the region also raises questions about the balance of power in the global mining industry and the implications for other players in the sector. This partnership between Guinea and China could well be a strong signal of the evolution of economic alliances on the African continent, and an indicator of the intensification of competition for global natural resources.
