Simandou presents an unprecedented opportunity for Guinea to use its natural resources for long term economic growth. As a development institution IFC has a unique mandate to support the sustainable development of country changing projects such as Simandou. As a partner in the project, IFC is uniquely placed to monitor the environmental and social management of the project, play the role of a neutral broker, draw on our global experience in areas such as local supplier development and help mobilize the vast amounts of funding (estimated at $20 billion) that will be needed to complete this complex project.
IFC & Simandou
IFC has been involved in Simandou since 2006 when we acquired a five percent stake in the project. Our investment to date totals $185 million. We currently hold a 4.6% stake.
IFC is actively involved in all aspects of the project; our roles to date have included working closely with our partners to ensure environmental and social compliance with our performance standards, and to finalize the Investment Framework.
We have also been working with Rio Tinto on a program to build the capacity of local firms to supply the project with goods and services and further spread the economic benefits of the project. The program has generated over $9 million in local contracts and trained 1400 people in Guinea representing 400 local businesses.
Going forward, we expect to also play a role in mobilizing the significant amounts of financing that will be required to build the project.
Economic Impacts of Simandou
The benefits of Simandou will extend beyond the project itself as its success will pave the way for other investments in the country.
Simandou is expected to generate more than 10,000 jobs during project development, and once operational will pay over $1 billion in taxes/royalties per year to Guinea and spend $2 billion on suppliers with a focus to source as much in the country as possible.
In 2012, Simandou employed over 4,500 people (including 3,600 Guineans) and paid over $160 million to 500 Guinean businesses for goods and services.
A 650km railway through Guinea will carry freight and passenger services in addition to iron ore and minerals haulage. A deep water port will accommodate the largest ships to have ever docked in Guinea and will support complementary trading activity including agriculture.