Simfer Iron Ore Project (Simandou, Blocks 3 & 4) Feasibility Study: $4.40B NPV, $4.60B Capex
Rio Tinto's Simfer Iron Ore Project (Simandou, Blocks 3 & 4) in Republic of Guinea, southeastern Guinea (Simandou Range, ~550 km southeast of Conakry) 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) has reported Feasibility Study results for the iron ore project in Republic of Guinea, southeastern Guinea (Simandou Range, ~550 km southeast of Conakry). 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 Base case: 65% Fe Fines price of US c136.10/dmtu CFR China (average of forecasts from CRU and Wood Mackenzie).
Production and mine plan. The project envisions an open-pit operation. Average annual production is approximately 60 Mtpa iron ore fines (dry).
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 465 projects we track
- Initial capex
- $4.60B
105% of NPV
costlier than 97% of 457 projects we track
- Study price assumption
- Base case: 65% Fe Fines price of US c136.10/dmtu CFR China (average of forecasts from CRU and Wood Mackenzie)
The Simandou Range iron ore project sits among the highest-ranked projects we track on after-tax NPV, at $4.40B, placing it ahead of the overwhelming majority of the 465 projects in our database. That rank is the headline, but it is a rank earned at feasibility level, which matters: an FS is the build-ready estimate, typically carrying a plus or minus 15% band, so these numbers deserve more confidence than a scoping study would. The study's base case rests on a 65% Fe Fines price of US c136.10/dmtu CFR China, an average of CRU and Wood Mackenzie forecasts. That is a forecast, not a market observation, and the returns are sensitive to it.
The constraint is the build. Initial capex of $4.60B is 105% of NPV, placing it among the most capital-intensive projects we track. That is the number to sit with. A project whose construction bill exceeds its own net present value has to be financed largely on faith in the back half of the mine plan, and every overrun lands directly on the equity.
What defuses that risk here is the sponsor's balance sheet. The company carries a market cap of roughly US$158.36B, so the build is small relative to equity, and the NPV gap to market cap runs the other way: well below the company's market cap on a rough currency-adjusted basis. This is one of 34 projects the company tracks, a diversified portfolio, so the build is fundable without the dilution that would sink a single-asset developer. The jurisdiction is the counterweight. Southeastern Guinea, in the Simandou Range, is not a mature mining jurisdiction, and permitting, infrastructure and political risk sit outside the model.
The question that decides this project: can a large, diversified sponsor deliver a $4.60B build in Guinea on schedule, or does execution risk in that jurisdiction erode a feasibility-level NPV that already sits below its own capex?
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.