Project – Target
This profile is a priority campaign targetBankTrack, Advocates for Community Alternatives (ACA), Center for Transnational Environmental Accountability (CTEA) & Human Rights Watch
Giulia Barbos, giulia@banktrack.org
Project – Target
This profile is a priority campaign targetBankTrack, Advocates for Community Alternatives (ACA), Center for Transnational Environmental Accountability (CTEA) & Human Rights Watch
Giulia Barbos, giulia@banktrack.org
Why this profile?
Nestled in the forested mountains of Guinea in West Africa, the Simandou iron ore mining project involves the construction of a large open-pit mine, a railway line and a deep-water port. The project risks the displacement of local communities, lost livelihoods, the destruction of critical habitats for endangered species, deforestation, and environmental pollution including greenhouse gas emissions. Communities in every area of the project have already suffered serious impacts to their agricultural and fishing livelihoods, pollution of water sources, and loss of land as a result of unchecked construction activities. Moreover, there are concerns regarding the project's transparency and accountability, as well as the potential for corruption and conflicts of interest.
What must happen
Banks and other financial institutions considering providing direct or indirect finance to this project should ensure its numerous environmental and social impacts and risks are addressed to the satisfaction of local communities. More specifically, communities demand that project developers
- commit to upholding the highest environmental and human rights standards, including those relating to resettlement and land acquisition;
- increase transparency by publishing all project agreements and up to date impact assessments;
- keep communities informed by meaningfully consulting with them on an on-going basis;
- properly account for impacts on climate change and biodiversity; and
- develop an independent grievance mechanism to address community complaints.
Project-affected peoples’ recommendations are set out in more detail by Action Mines in their report on the project here (see page 32, in French).
Sectors | Iron ore mining, Mining |
Location |
|
Status |
Planning
Design
Agreement
Construction
Operation
Closure
Decommission
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Website | https://www.riotinto.com/en/operations/projects/simandou |
The Simandou project, located in the Simandou mountain range area in southeastern Guinea, is one of the largest untapped high-grade iron ore deposits in the world. Simandou’s iron has been coveted by the largest international mining companies for decades, but complicated operational logistics, combined with extreme political instability, corruption allegations, and legal disputes, have made this a challenging feat to achieve.
The northern half of the mining area, Block 1 and 2, is owned by Winning Consortium Simandou (WCS), led by Singapore-based Winning International Group.
The southern part of the mining area project – Block 3 and 4 – is owned by Simfer, led by Anglo-Australian mining company Rio Tinto, which acquired rights to Simandou in 1997.
In August 2022, WCS and Rio Tinto Simfer agreed to start the construction of a 650 km railway, a deep-water port, and other infrastructure needed to support mining operations, with a view to start production by 2025.
Impact on human rights and communities
Land acquisition and displacement The construction of the railway and mine sites will likely force hundreds of people to leave their lands and homes. This has already been the case for local communities who have been evicted to make space for Winning Consortium Simandou (WCS)'s living quarters in Block 1 and 2. These communities, especially women, were not properly consulted. In addition, the railway, which is currently being constructed for the Simandou project, passes through a territory that is home to at least 450 communities. Several community members have already been impacted by the railway infrastructure, and have expressed concerns about the obstacles they face in negotiating equitable compensation, with many reporting under-compensation or outright theft of their homes and agricultural lands.
Impacts on livelihoods WCS' own environmental and social impact assessment (ESIA) (1) warns that deforestation and land loss associated with the construction of the mine’s infrastructure risk impacting activities that communities rely on for food security, such as farming, hunting, and fishing, and access to water sources. Coastal communities living nearby the port that is also currently being developed for the Simandou project complain of the complete devastation of their livelihoods, as port construction and vehicle traffic have driven away fish populations and blocked them from access to productive fishing grounds. Communities living in Blocks 1 and 2 of the project have also been heavily impacted, as noise pollution produced by company machinery has driven away usual wildlife species, creating scarce hunting conditions. These communities have also reported a decrease in agricultural yields due to laterite soil and mud from the Simandou project being dumped nearby and invading cultivation areas.
Impacts on civic space Guinea's civic space, including threats to freedom of association and expression, is classified as “repressed” in the CIVICUS 2022 assessment. Rights-holders at the local and national levels may risk reprisals when seeking to denounce violations of their rights.
Impacts on cultural rights The pathway of the railway, as identified by WCS, has the potential to impact over 100 cultural sites, including areas and structures of spiritual value like sacred sites, graves, and cemeteries. Many of these have yet to be assessed for significance, and it remains unclear how many will be destroyed or relocated. WCS's ESIA for its mining blocks fails to meaningfully assess or plan for preservation of cultural sites at all.
Impact on climate
Carbon emissions The Simandou iron ore mine has the potential to generate significant carbon emissions, including during land and forest clearing, drilling, blasting, hauling, and processing. WCS’s own environmental and social impact assessment (ESIA) estimated that Blocks 1 and 2 alone have the potential to produce up to 19 million tonnes of carbon emissions over the 22-year anticipated lifetime of the mine, which is equal to about 41% of Guinea’s total emissions in 2020 and equivalent to burning 10 million tonnes of coal. An independent expert evaluated the company’s ESIA, and concluded that this is “likely a gross underestimate”, because of a failure to include emissions resulting from deforestation. On top of this, the land clearing alone - also as estimated by WCS - could release up to 271,300 tonnes of carbon dioxide, which, according to an analysis by Human Rights Watch, is equivalent to burning about 136,000 tonnes of coal.
Not only will the project lead to significant deforestation, but according to WCS’s ESIA, the energy needed to power the mining operations will be generated with a Heavy Fuel Oil (HFO) power plant, a major source of carbon emissions and other toxic byproducts.
Additionally, the railway that will connect the Simandou mine with the coastal port will utilize diesel-fueled locomotives, which emit high levels of nitrogen dioxide. Nitrogen dioxide is 240 times more destructive to the ozone layer than carbon dioxide, posing a significant risk to air pollution, health issues and environmental damage.
Impact on nature and environment
Impacts on biodiversity and wildlife Guinea has been facing rapid rates of deforestation, with the Nzérékoré region – where the Simandou project is located – having experienced the highest rate of deforestation in the country between 2001 and 2021. The clearance of large areas of forest for mining can lead to habitat loss and fragmentation, disrupting ecosystems and affecting biodiversity. The Simandou region is home to a diverse range of wildlife, including endangered and endemic species. The loss of habitat can lead to a decline in these populations, which can have long-term ecological consequences. Winning Consortium Simandou (WCS)’s activities have already put nature into great danger, as the company has already cleared approximately 85% of land necessary for the construction of the railway, according to an analysis by Earth InSight. The railway’s route cuts through extensive tracts of primary rainforest known to be the natural habitat of the critically endangered Western Chimpanzee and African Forest Elephant and the endangered Western Red Colobus monkey.
There are clear indications that the impacts of the railroad construction extends well beyond what was presented in the ESIA. A 2022 review of WCS’s environmental and social impact assessment revealed that the company failed to assess its mining blocks for these well-known endangered species, and that its plans to mitigate impacts on biodiversity were grossly inadequate.
Impacts on protected nature areas The railway traverses several protected areas, including the Haut Niger National Park, which was created to protect one of the last remnants of dry forest in Guinea, and the Outumba-Kilimi-Kuru Hills-Pinselli-Soya Transboundary Priority Landscape, which includes primary forest, buffer zones, and corridors essential for the survival of endangered species such as the forest elephant, pygmy hippopotamus, and the Western African chimpanzee. The railway will run just adjacent to other protected areas, such as the Outumba-Kilimi National Park in Sierra Leone and Kounounkan Classified Forest, likely opening these previously isolated areas up to inward migration and exploitation for bushmeat and forest clearance.
Impacts on water sources The railway currently being developed cuts across several important waterways, and communities have already reported that critical water streams have been polluted due to construction activity. Reported cases include the pollution of watercourses by pipeline water at the Sekoussoriyah tunnel (Kindia region), pollution of the Balin stream at Oure Kaba (Mamou region), pollution of springs (Warada and Namba) by drilling work at Damaro (Kérouané region), and drainage of mud and sand into the Karako-Konsankoro stream bed (Kérouané region). Additionally, the Simandou mining project will release heavy metals, posing a threat to the health of nearby communities and endangering aquatic ecosystems. According to the project's environmental and social impact assessment (ESIA), there is a high probability that toxic effluents will be produced near the region's major rivers, notably the Dion, Milo and Diani. Pollution of water sources – as explained by a 2022 assessment of the WCS’s ESIAenvironmental and social impact assessment – could have devastating impacts, as the mining blocks cover over 100 km of mountains whose streams feed directly into the water of the Niger River, Africa’s third longest river and a critical water source across four West African countries. Therefore, a comprehensive analysis of the project’s impacts on water is necessary before it goes ahead.
Impact on pandemics
Emergence of new infectious diseases Several studies suggest that large-scale industrial development projects, such as mining, can increase the risk of zoonotic disease transmission, which can lead to pandemics. A recent report by the United Nations Environment Programme (UNEP) emphasises the importance of protecting biodiversity and natural ecosystems in preventing future pandemics. The report notes that the destruction of natural habitats, including deforestation, which often takes place in mining operations and is a risk associated with the Simandou project, can increase the likelihood of zoonotic disease transmission. Furthermore, the railway associated with the Simandou project cuts across an area that was the epicentre of the West Africa Ebola outbreak, which killed over 11,000 people between 2013-2016. This shows the concrete risks of pandemics and other widespread disease outbreaks in this area in Guinea.
Other impacts
Links to impacts at Boké bauxite mine WCS was set up by the same founders as the SMB Winning Consortium, a mining group that exploits the Boké bauxite mine in northwestern Guinea. This consortium has a disastrous track record of unremediated human rights impacts and disrespect of community land and environmental rights, as documented extensively in a 2018 Human Rights Watch report and a 2023 Natural Justice community audit. The pattern of negligence with respect to air quality, uncompensated or undercompensated taking of lands, and pollution of water sources already observed along the Simandou railway route - along with the lack of transparency and hesitation to engage substantively with affected communities - is strikingly similar to the criticisms of SMB’s record at Boké.
The total costs of the Simandou project are reported at US$ 15 billion. Finance for the project is not yet agreed.
The two main project sponsors are Singapore-based Winning International Group, the majority shareholder of the Winning Consortium Simandou (WCS), developing Blocks 1 & 2 in the north; and Anglo-Australian mining company Rio Tinto, which is leading the Simfer consortium, developing Blocks 3 & 4 in the south. Rio Tinto’s Simfer is expected to invest $6.2 billion in developing Simandou.
Commercial banks finance Rio Tinto via loans, bonds, and shareholdings. See more information on our Rio Tinto Dodgy Deal Profile here.
Commercial banks have also financed Winning International Group, a privately held company, via loans. DZ Bank, BNP Paribas, Credit Suisse, and Standard Chartered all provided loans to Winning International Group in the years between 2018 and 2022 (Profundo finance research, June 2023).
In addition, Baowu Group, which is part owner of Simfer and appears set to buy an important stake in WCS’s operations as well, leads a consortium of Chinese steel manufacturers and other investors that is expected to implement project financing.
Block 1 and 2 of the Simandou project are owned by the Winning Consortium Simandou (WCS), which is owned by Singapore-based Winning International Group (45%), China's Hongqiao Group (35%) and Guinea's United Mining Suppliers (15%).
Blocks 3 and 4 are owned by Simfer, which is jointly owned by Australian mining company Rio Tinto (53%) and Chinese Chalco (47%). Chalco is in turn owned by a consortium of Chinese state-owned enterprises, most notably Chinalco and Baowu, the world’s largest aluminum and steel companies respectively.
Applicable norms and standards
Simandou Project: conservation view
Source: EarthInsight. See additional maps from EarthInsight's rapid assessment of threats to Conservation, Biodiversity and Communities in the Impacts section above.