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Vale and BSGR stripped of Simandou - does Africa's Pilbara have another chance?

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29 April 2014

Vale and BSGR stripped of Simandou - does Africa's Pilbara have another chance?

Report summary

The Government of Guinea (GoG) have decided to withdraw the mining permit held by VBG, the joint venture of BSGR and Vale, in the giant Simandou iron ore deposit. Based on an estimated US$12.7 billion in capital, we estimate a valuation of US$2.6 billion for the deposit, with an implied 62% Fe Pilbara Fines FOB break-even price of US$75.6/tonne (2014 real). Though the deposit is potentially extremely profitable, there are considerable risks involved with the project.

Table of contents

  • Executive Summary
  • History of the deposit
    • Figure 1: Detailed map
    • Figure 2: 62% Fe adjusted marketable reserves as of 01/01/2014
    • Table 1: Capital cost estimates (2014 real)
    • Table 2: Operating cost estimates (2014 real)
    • Anglo American:
    • BHP Billiton:
    • Rio Tinto:
  • Who dares wins?

Tables and charts

This report includes 6 images and tables including:

  • Vale and BSGR stripped of Simandou - does Africa's Pilbara have another chance?: Image 1
  • Vale and BSGR stripped of Simandou - does Africa's Pilbara have another chance?: Image 2
  • Vale and BSGR stripped of Simandou - does Africa's Pilbara have another chance?: Table 1
  • Vale and BSGR stripped of Simandou - does Africa's Pilbara have another chance?: Table 2
  • Vale and BSGR stripped of Simandou - does Africa's Pilbara have another chance?: Table 3
  • Figure 2: 2020 US$/dmt 62% Fe equivalent curve FOB seaborne export (2014 real)

What's included

This report contains:

  • Document

    Vale and BSGR stripped of Simandou - does Africa's Pilbara have another chance?

    PDF 2.35 MB