$26B project operator forces workers to go on leave indefinitely

A foreign mining company stood down its workforce until further notice at a mega development.

China-backed SBM Winning Consortium Simandou (WCS) recently forced as many as 10,000 workers to go on leave indefinitely at the US$20 billion (A$26.7B) Simandou Mine – 526km southeast of Conakry.

Disgruntled insiders fear WCS could announce mass redundancies if authorities do not let work resume at the project, in which Rio Tinto owns a majority stake.

“WCS has put workers on forced leave with the prospect of layoffs if a dispute with Guinea’s government over infrastructure for a massive iron project is not resolved, three sources told,” Reuters reported.

When the newswire agency contacted the Asian proponent about the allegations, no spokesperson responded before the publication deadline.

“WCS did not immediately reply to a request for comment,” it said.

Both proponents claim the nearest port is across the southeastern border in neighbouring Liberia. Building a shorter route would be covered in the original US$12B (A$17.7B) infrastructure expenditure.

Guinea Mines Minister Moussa Magassouba prefers to construct a 670km long railway line to domestic ports. Building this longer, cross-country route would cause capital expenditure to blow out by tens of billions of dollars.

Neither Rio nor WCS believe such a proposal stacks up economically. However, Magassouba warned both Rio and the WCS stand a real chance of being removed from the project if they do not deliver the longer railway, which will proceed “with or without” them.

“Sufficiently responsible financially and technically companies are waiting,” he previously said.

The proposed mine is home to one of the world’s “best undeveloped” mineral deposits. It is widely speculated to be resource-rich enough to devalue, compete against and possibly replace Western Australia’s Pilbara exports.

The latest deal includes constructing a 670km railway, associated infrastructure and both mine and port facilities before the end of 2024. On completion the operation would produce up to 150 million tonnes a year of product from a combined 2B tonnes at 65 per cent grade. It would also create an estimated 45,000 jobs.

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