Simandou Aims for First Cargo Shipment by End of 2025

Baoshan Iron & Steel, known as Baosteel and China’s largest publicly traded steelmaker, recently announced its expectation that the Simandou iron ore project in Guinea will complete its infrastructure construction and mine its first cargo by the end of 2025, as reported by several media reports. This project is anticipated to have an annual production capacity of 120 million metric tons, positioning it as the world’s largest mine for high-grade iron ore. This type of iron ore is increasingly vital for facilitating the green transition in the global steel value chain, as demand for more sustainable production methods rises.

The Simandou project comprises four mining blocks, with two located in the northern region of Guinea being developed by a consortium that includes the Singapore-based Winning International Group, Weiqiao Aluminium (a part of China Hongqiao Group), and United Mining Suppliers. Recently, Baowu became a significant shareholder in the project following the transfer of shareholding rights from the Winning Consortium Simandou (WCS) in June, solidifying its commitment to the venture.

In a briefing regarding its third-quarter results, Baosteel emphasized the advantages of Simandou’s rich high-grade resources and favorable mining conditions, stating that these factors will contribute to relatively competitive production costs. The company aims to optimize its ore blending structure once production at Simandou commences, enhancing its overall operational efficiency and product quality.

Baosteel operates as a subsidiary of state-owned China Baowu Steel Group, which is recognized as the largest steelmaker globally by output. In addition to its involvement in Simandou, the company is also making strides in sustainability. It announced plans for a zero-carbon plant in Zhanjiang, located in Guangdong province, which is set to be powered by green hydrogen and renewable electricity. This facility, backed by an investment of 4.5 billion yuan (around $631 million), is scheduled for completion in 2025, further underscoring Baosteel’s commitment to environmentally friendly practices.

Despite these ambitious projects, Baosteel recently reported a significant decline in its net profit for the third quarter, plummeting nearly 65%. This downturn has been primarily attributed to falling steel prices, reflecting broader challenges within the industry. Nonetheless, the company reported record-high export orders, reaching 4.66 million tons in the first three quarters of the year, positioning it on track to achieve its target of 6 million tons for 2024.

Overall, Baosteel's activities, particularly its involvement in the Simandou project, highlight the company's strategic focus on sustainable growth and adaptation to changing market conditions, while also navigating the complexities of the current steel landscape.