Simfer Iron Ore Project (Simandou South, Blocks 3 & 4 - Ouéléba and Pic de Fon) Feasibility Study: $4.40B NPV, $4.60B Capex
Rio Tinto's Simfer Iron Ore Project (Simandou South, Blocks 3 & 4 - Ouéléba and Pic de Fon) in Republic of Guinea, approximately 550 km southeast of Conakry, southern 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 South, 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, southern 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 Specific product pricing determined from a 65% Fe Fines price of US c 136.10 / dmtu CFR China, sourced from an 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 (dry) iron ore fines.
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 537 projects we track
- Initial capex
- $4.60B
105% of NPV
costlier than 97% of 510 projects we track
- Study price assumption
- Specific product pricing determined from a 65% Fe Fines price of US c 136.10 / dmtu CFR China, sourced from an average of forecasts from CRU and Wood Mackenzie.
The Simandou iron ore project sits in the top tier of the 537 projects we track, with an after-tax NPV of $4.40B ranking higher than 96% of that universe. That is a rare position. But rank alone tells an investor little about whether the value is reachable, and here the answer turns on two things: the jurisdiction and the build.
Guinea's southern Simandou Range, roughly 550 km southeast of Conakry, is a higher-risk operating environment than the mining-friendly jurisdictions that dominate the upper reaches of our rankings. That does not disqualify the asset, but it means the headline NPV should be read with a wider band of execution risk than a comparable study in, say, Australia or Canada. The feasibility study is the strongest form of estimate we see, typically a plus or minus 15% band, so the numbers carry real weight. The pricing assumption, a 65% Fe Fines price of US c 136.10 / dmtu CFR China drawn from CRU and Wood Mackenzie forecasts, is the key sensitivity: the returns rest on that forecast holding.
The constraint that matters most is capital. Initial capex of $4.60B equals 105% of NPV, a ratio lower than only 3% of the 510 projects we track. That is extreme capital intensity, and it means the economics are highly geared to cost control and schedule. The mitigating factor is scale: the company's US$151.81B market cap makes the build small relative to its equity, and this is one of 48 projects in a diversified portfolio, so funding is unlikely to be the binding constraint. The question that decides this project is whether the 65% Fe price assumption holds through construction and ramp-up.
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.