Minmetals Securities recently released a research report on the steel industry: The Simandou Iron Mine in Guinea is the world's largest and highest - grade undeveloped iron mine, with Chinese - owned equity resources accounting for more than 50%. Chinese - funded enterprises such as Baowu Steel and Chinalco have a penetration share of more than 50% in the southern and northern blocks, and Baowu Steel leads the construction of the northern block. The initial combined production capacity of the Simandou Iron Mine reaches 120 million tons per year. The market generally expects that the Simandou Iron Mine will start to increase production in 2026, with the production release accelerating from 2027 - 2028, and full - capacity production will be achieved around 2030.

The following is an abstract of the research paper:

Event description

November 11, 2025, the President of the Republic of Guinea, together with the winning alliance, China Baowu, Chinalco Group, and Rio Tinto Group, attended a ceremony held at the port in Forécariah Province to celebrate the official commissioning of the Simandou project.

Event review

The Simandou Iron Mine in Guinea is the world's largest and highest - grade undeveloped iron mine in terms of reserves, with Chinese - funded equity resource volume exceeding 50%. Chinese - funded enterprises such as Baowu Steel and Chinalco have a penetration share of over 50% in the southern and northern blocks. Baowu Steel takes the lead in the construction of the northern block. The initial combined production capacity of the Simandou Iron Mine reaches 120 million tons per year. The market generally expects that the Simandou Iron Mine will start to increase production in 2026, with the acceleration of production release from 2027 - 2028, and full - capacity production will be achieved around 2030.

The Simandou iron mine has significant strategic significance for China to get rid of its dependence on Australian iron mines, break through the pricing of iron mines, etc., but China's iron ore supply security needs more flagship projects. The Simandou iron mine is the largest iron mine overseas, which China leads and promotes the construction of. After reaching full production, its output will account for 5% of the global iron ore supply, which is equivalent to 10% of China's iron ore import volume in 2024. The Simandou project will increase China's chips in the global iron ore discourse power competition, and diversify China's iron ore import sources, but it cannot completely change the import pattern of China's high dependence on the four major mines.

The Simandou iron mine is the main increment of global iron mine supply in the future, which will drive the iron ore price into a slow downward channel and form a substitute for high-cost marginal mines. With the production of Simandou iron mine by 2030, it is expected that the global iron mine supply and demand pattern will shift from a tight balance to a slightly loose, and the iron ore price will slowly decline. After the production, the AISC cost of Simandou iron mine is expected to be located at the 75th percentile of the global iron mine, squeezing out the low-grade and high-cost iron mine capacity.

The Simandou iron mine has set an example for Chinese-funded enterprises to jointly go global and secure strategic resources. China Baowu entered the market through infrastructure construction and, in a joint venture model, coordinated other infrastructure enterprises to jointly go global, creating a new benchmark for going global to secure strategic resources. It is suggested that Chinese-funded mining enterprises learn from China Baowu's joint venture model to go global and complement each other's advantages with upstream and downstream enterprises in terms of resource acquisition, construction and operation.

Risk warnings: 1. The commissioning progress of the Simandou iron mine is slower than expected; 2. The political situation and mining policies in Guinea are uncertain; 3. Macroeconomic fluctuations affect downstream demand, which does not meet expectations.

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.