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Rio Tinto board approves world’s biggest mining project

The board of Anglo-Australian mining giant Rio Tinto has approved what will be the world’s biggest mining project, CEO Jakob Stausholm told the Financial Times (FT) on Wednesday.

The company will invest $6.2bn in the Simandou mining project in West Africa, the world’s largest untapped high-grade iron ore deposit. Funding will go towards the construction of a 552km railway to transport high-grade iron ore from two new mines in the Simandou mountains to a new deep-water port on Guinea’s Atlantic coast. One of the mines will also be built and operated by Rio Tinto.

“The board yesterday sanctioned the biggest mining project in the world,” Stausholm told the FT. “Early November I was out there. I flew over the rail line, the mines and the port in a helicopter, it is amazing what has happened,” he said, adding that tunnels along the rail corridor have already been prepared and materials for construction ordered.

The company said in January it expects to begin infrastructure work on the project this year after almost three decades of setbacks and corruption scandals, with production of iron ore potentially beginning as soon as 2025.

Rio Tinto’s state-owned Chinese partners on the project include Chinalco, the world’s biggest aluminium producer, and Baowu, the world’s largest steel producer. The two companies still require final investment approval from the Chinese Government, but Stausholm said he was “very confident” this would happen soon.

Baowu raised $1.4bn (10.07bn yuan) last month from a bond issue in China. It plans to use the funds to help finance the Simandou project, Stausholm said, adding that the Chinese Government was discussing funding with each state-owned company, which was “the last part of the process”.

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