Nimba Iron Ore signals shift toward African high-grade fines supply

This could also signal a shift toward a large-scale supply of African iron ore in the spot market when more African iron ore projects come on stream. Such a shift could change trade flows that have been in place for decades since Australian fines started becoming the mainstay of iron ore supply for the mammoth Chinese steelmaking industry.

“You could say that Nimba Iron Ore is a jewel in the African iron ore landscape, especially with good-quality direct shipping ores located just 285 kilometers away from a good port,” Société des Mines de Fer de Guinée (SMFG) chairman Guy de Selliers told Fastmarkets in an exclusive interview.

“The Simandou iron ore project, too, is another jewel, but it is located further away from the ports compared with Nimba,” he added.

The Nimba Iron Ore Project is operated by SMFG, the Guinean subsidiary of HPX.

It is located in the Guinean Nimba Mountains, in the southeast of the country and adjacent to the Liberian and Ivoirian borders. SMFG expects to mine approximately 450 million tonnes of ore across a 15–25-year life span. The ore will then be transported via an existing railway in Liberia, which will be rehabilitated and extended to link up with the loading facility in the Port of Buchanan.

Railway works will happen in three places. Capacity will be increased with additional passing loops on the 243km stretch of the existing railway from Tokedah, Liberia to Buchanan port. A 20km stretch of an older rail corridor from Tokedah to the Guinean/Liberian border will be refurbished. And a new 22km stretch within Guinea will be built to cross the border to connect with the 20km refurbished stretch.

High-quality, low cost

Nimba Iron Ore’s product is holding up very well compared with other high-grade fines in other parts of the world.

“Our feasibility studies show that it will produce up to 65-66% fines of very low silica and phosphorus levels, with little risk of seasonal weather-related disruptions, even though the Nimba Mountains see different periods of intense rain and heat throughout the year,” de Selliers said.

“If you compare this to other miners’ product, they are generally of lower quality and need additional beneficiation before shipping out,” he said.

A pre-feasibility study concluded in 2021 estimated that Nimba Iron Ore’s operating costs would be below $18 per tonne, way below a projected long-term iron ore benchmark price of $76 per tonne. This also excludes the premiums expected to be paid for high-quality iron ore of higher Fe content, which will see a significant increase over the benchmark price.

De Selliers is determined that production will start on time.

“We will ensure that the product comes out, and that exports will start, and that production will be done in a responsible way. The world needs high-grade ores, and we want to support the decarbonization drive,” he said.

Nimba Iron Ore is advancing well in the permit process, which should allow construction to start in 2023. The project will take four years to be completed, and de Selliers expects exports to start in 2027.

China is a key market for Nimba Iron Ore, although it is not the only one.

“There are various other markets, such as the European Union. However, there are blast furnaces in Europe which will eventually be mothballed, so the biggest market will remain China and other non-European countries,” de Selliers said.

Sustainable mining

Sustainable mining is also at the forefront of de Sellier’s mind.

“There is a detailed plan to construct an underground tunnel, so that transporting the ore doesn’t disrupt the flora and fauna. We are very aware of our responsibility and also want to prove this is quite a new example of mining,” he said.

“We are committed to preserving the biodiversity with strict compliance to international standards from construction right up till mine closure and rehabilitation,” he said.

In SMFG’s pre-feasibility study, a tunnel has been planned to evacuate ore from the mine down to the lowlands, where minimal processing and stockyards are required.

“This will come at additional costs over [traditional] conveying options, but will minimize project footprints above ground where possible,” SMFG told Fastmarkets in a statement.

The project will also benefit the Guineans living in the area, especially by including them in the project and not making it an “enclave.”

The goal for the project is to create an overall ‘net positive’ value for the communities around the Nimba Range.