Industry experts have dismissed concerns Rio Tinto’s new Simandou iron ore mine in Africa will impact Western Australia’s thriving industry.
Nestled in a mountain range south east of Guinea, the Simandou iron ore mine has been touted to be the largest deposit of iron ore in the world.
Current ore reserve estimates project around 1.5 billion tonnes of high-grade iron ore contained in a 100km surface area.
With production set to begin by the end of the year, there has been industry speculation over the impact the mine is likely to have on WA’s iron ore industry.
But experts have put those concerns to rest, confident the state’s sector, which delivered $9.4 billion in royalty receipts to the state Government in 2023, will continue to thrive with minimal impact.
According to WA’s 2024 iron ore profile, the state exported nearly 900 tonnes of iron ore last year, firmly cementing Australia as the world’s largest exporter at 38 per cent of supply.
Simandou is expected to deliver up to 60 million tonnes of iron ore per year once fully ramped up.
“Put it in perspective – 60 million tonnes against [around] 900 million tonnes. Well, it’s not even 10 per cent. It’s not going to put WA out of business,” resources analyst Tim Treadgold told the ABC.
Australia Institute senior economist Matt Grudnoff agreed.
“If it has an impact, it will be over the longer term, and we will see the WA economy adjust over time,” he said.
“I don’t think it would necessarily spell the doom of the WA economy.”
Rio Tinto’s latest quarterly report released last week reflected a period of wild weather-impacted operations across the company’s iron ore assets in WA.
Despite this, the major remains on track to meet its guidance with Rio chief executive Jakob Stausholm indicating the state is still the company’s key focus.
“We are making excellent progress with our major projects to deliver profitable organic growth,” he said.
“We will continue to drive progress towards our long-term strategy to deliver profitable growth, attractive shareholder returns and build a stronger, more diversified business.”
