Simandou Targets Annual Iron Ore Exports of 120 Million Tonnes at Full Operation

Key Facts

Rio Tinto said the rail and port network for Guinea’s Simandou project is intended to support exports of up to 120 million tonnes of iron ore a year from the Simfer and WCS concessions once operations are complete and production has ramped up. The figure is a targeted export ceiling at full-scale operation, not output already achieved or a confirmed date for reaching it by 2030. Shipments have begun: the project’s first cargo, carrying 200,000 tonnes, arrived at Majishan port in China on January 17, 2026, according to the Shanghai government, citing Baowu Steel Group. The start gives China a new source of supply, while the pace of growth remains tied to completion of the transport and export system. The project puts Australia in line for greater competition over the longer term, but current volumes are nowhere near the targeted capacity.

Rio Tinto’s data show the gap between the target ceiling and the current operating stage. The company shipped 2.2 million tonnes to China in the first half of 2026, while Simandou sales totaled 0.4 million tonnes at an average iron grade of 65.8%. The mine had 7.6 million tonnes of uncrushed ore at the end of June. These figures indicate the project is still building stockpiles and expanding operations, rather than delivering stable flows at a level matching its stated capacity. S&P Global said exports in 2026 are likely to reach about 15 million tonnes, with the planned capacity of 120 million tonnes a year expected at full operation.

The project’s ability to expand depends on massive infrastructure, including more than 600 kilometers of new railways crossing Guinea, as well as river-barge facilities and a transshipment port, according to Rio Tinto. Wood Mackenzie forecast exports of nearly 16 million tonnes in 2026, with volumes rising gradually thereafter. But it said infrastructure constraints and logistical complexities could make the increase uneven and irregular. This means the targeted annual capacity will not automatically become available supply as soon as operations begin, since shipment growth depends on the progress and capacity of facilities to move ore to markets. The length of the transport route and its multiple links also make logistics a key factor in how quickly new supplies enter the market.

Simandou’s entry is particularly significant for China, which imported 1.3 billion tonnes of seaborne iron ore in 2025. Australia was its largest supplier, providing 830.9 million tonnes that year. Australia’s total seaborne exports reached 977.3 million tonnes, of which 85% went to China, according to S&P Global. These figures show how closely Australia’s export market is tied to Chinese demand and highlight the scope for new suppliers to compete as shipments expand. S&P Global estimated that Simandou and related operations could account for about 4.8% of global supply at full operation, equivalent to 9.7% of China’s iron ore import demand in 2024.

The project’s high-grade ore offers a competitive advantage; its iron grade is 65%, according to S&P Global, while Rio Tinto’s sales averaged 65.8% in the first half. But transport costs could limit that advantage on delivery to China. S&P Global estimates seaborne freight costs from Simandou at about $23.56 per dry tonne in its 2030 estimates, compared with about $9 to $10 for most major Australian producers. Simandou’s cash production cost at the export gate is estimated at between $27 and $28 per dry tonne. The organization said higher freight costs “ultimately level the competitive playing field,” despite competitive production costs at the export gate.

Market participants do not expect Simandou’s start-up to meaningfully increase the surplus in 2026, amid uncertainty over the volumes available at this stage. They said iron ore prices could post a moderate decline the following year, while the surplus is expected to grow significantly from 2027. By contrast, Vale’s chief executive said the market could remain balanced over the longer term, pointing to annual depletion of iron ore resources of between 60 million and 80 million tonnes and saying new supplies could offset some of it. These estimates fit a market outlook in which the project’s impact depends on how quickly shipments grow and how much supply leaves the market through resource depletion. The Australian government expects iron ore to remain the country’s largest goods export within the resources and energy sector over its forecast horizon, citing lower production costs and proximity to Asia as sources of competitiveness.