Simfer Iron Ore Project (Simandou Blocks 3 & 4 - Ouéléba and Pic de Fon) Feasibility Study: $4.40B NPV, $4.60B Capex
Rio Tinto's Simfer Iron Ore Project (Simandou Blocks 3 & 4 - Ouéléba and Pic de Fon) in Republic of Guinea, approximately 550 km southeast of Conakry, Simandou Range has a Feasibility Study outlining an after-tax NPV of $4.40B and initial capital of $4.60B.
Rio Tinto's Simfer Iron Ore Project (Simandou Blocks 3 & 4 - Ouéléba and Pic de Fon) has reported Feasibility Study results for the iron ore project in Republic of Guinea, approximately 550 km southeast of Conakry, Simandou Range. The study headlines an after-tax net present value of $4.40B at a 8% discount rate. It reflects Rio Tinto's (RIO) latest disclosed economics for the asset.
Economics. The after-tax NPV is $4.40B using a 8% discount rate. Initial capital expenditure is estimated at $4.60B. Economics are based on 65% Fe Fines price of US c 136.10 / dmtu CFR China (average of CRU and Wood Mackenzie forecasts).
Production and mine plan. The project envisions an open-pit operation. Average annual production is approximately 60 Mtpa iron ore fines (dry). Average head grade is 65.3% Fe (marketable product reserves grade).
Resources and ownership. The company holds a 45.05% interest in the project.
These figures are extracted from Rio Tinto's technical disclosures and reflect the most recent Feasibility Study on file. Compare this project against other developers and producers in our project economics database, and always verify the numbers against the original technical report before making any investment decision.
Reserves & Resources
| Category | Tonnage | Grade | Contained |
|---|---|---|---|
| Proven | 123 Mt | 66.4% Fe, 1.0% SiO2, 1.2% Al2O3, 0.07% P, 2.5% LOI | — |
| Probable | 552 Mt | 65.0% Fe, 0.9% SiO2, 1.8% Al2O3, 0.10% P, 3.9% LOI | — |
| Proven & Probable | 675 Mt | 65.3% Fe, 0.9% SiO2, 1.7% Al2O3, 0.09% P, 3.6% LOI | — |
| Category | Tonnage | Grade | Contained |
|---|---|---|---|
| Measured | 66 Mt | 67.1% Fe, 1.9% SiO2, 1.1% Al2O3, 0.04% P, 1.0% LOI | — |
| Indicated | 198 Mt | 66.2% Fe, 1.8% SiO2, 1.5% Al2O3, 0.05% P, 1.8% LOI | — |
| Measured & Indicated | 264 Mt | 66.5% Fe, 1.8% SiO2, 1.4% Al2O3, 0.05% P, 1.6% LOI | — |
| Inferred | 340 Mt | 65.8% Fe, 1.4% SiO2, 1.4% Al2O3, 0.07% P, 2.8% LOI | — |
Our Analysis
- NPV after-tax
- $4.40B
higher than 96% of 527 projects we track
- Initial capex
- $4.60B
105% of NPV
costlier than 97% of 499 projects we track
- Study price assumption
- 65% Fe Fines price of US c 136.10 / dmtu CFR China (average of CRU and Wood Mackenzie forecasts)
The Simandou Range project sits in rare air on returns: its $4.40B after-tax NPV ranks above 96% of the 527 projects we track across all commodities. That ranking is the headline, and it is earned at feasibility level, the build-ready estimate that typically carries a plus or minus 15% band. This is not a scoping study dressed up as something firmer, so the numbers deserve to be weighted accordingly.
The constraint is capital. Initial capex of $4.60B equals 105% of NPV, a ratio lower than only 3% of the 499 projects we track. That is the defining feature of the asset: it consumes more capital than it creates in present-value terms, and the returns only work if the build stays inside that band. The mitigating factor is the sponsor. At a US$155.56B market cap, the company can absorb a $4.60B build without strain, and this is one of 46 projects in its portfolio, so the funding risk that would sink a single-asset developer is largely neutralised here. The NPV also sits well below market cap on a rough currency-adjusted basis, which cuts both ways: either the asset is not yet reflected in the equity, or the market is discounting execution, jurisdiction or the iron ore price deck.
That price deck is the swing factor. The study assumes a 65% Fe Fines price of US c136.10/dmtu CFR China, an average of CRU and Wood Mackenzie forecasts. The NPV rests on that assumption holding through construction and ramp-up, and it is the single input most worth stress-testing: a lower realised price would compress the return that the ranking above depends on. The question that decides this project is not whether the ore is there, but whether the company delivers a $4.60B build in the Republic of Guinea on time and on budget.
Our take, benchmarked against the project economics in the Mining Stocks database. Figures are estimates drawn from company technical reports — not investment advice; always verify against the source filing.