Baowu completes Simandou North, with 60 Mt a year of planned iron ore capacity

China Baowu said on November 10 that the second production line at the Simandou mine run by the Baowu-Winning (宝赢) joint venture in Guinea started operating on November 6, local time. The last key step was a full heavy-load test of the downhill belt conveyor from the CS area. According to Baowu, this completes the entire mine, rail and port chain of the Simandou North project, which moves from construction into operation one year after the first line started.

Simandou is Africa’s largest iron ore deposit and one of the world’s largest high-grade deposits, with proven reserves of 4.4 billion tonnes, according to a Shanghai Observer report. The project combines a mine, a railway and a port, with total investment of more than US$20 billion. The mine is split into a northern and a southern block. The north comprises blocks 1 and 2 and the rail and port infrastructure that serves them, with resources of about 1.54 billion tonnes, an iron grade of 65.28% and planned capacity of 60 million tonnes a year: 30 million per line.

The project started producing in November 2025, two months ahead of schedule, and since then the first line has produced and shipped more than 10 million tonnes of finished ore, according to Baowu. The second line had to overcome complex geology, short construction windows in the rainy season and long cross-border supply chains. The statement does not say when the northern block will run at its full rate of 60 million tonnes a year.

Baowu has been negotiating over the northern block with the Winning Consortium (赢联盟) since 2020. It bought 49% of the northern mine in June 2024 and raised its stake to 51% in January 2026, becoming the controlling shareholder. Simandou’s other two blocks belong to Simfer, a joint venture of Rio Tinto and Chinalco, according to Mining Discovery.

The market effect is already visible. In a note cited by Mining Discovery on November 3, Macquarie said Simandou had single-handedly supported seaborne iron ore volumes, offsetting supply cuts elsewhere, and estimated that the project’s full-year exports could reach about 28 million tonnes if October’s pace holds. According to the same report, iron ore prices have retreated about 24% from their May peak and dipped below US$90 a tonne in October. Guinea exported 8.9 million tonnes of iron ore in the third quarter, up from 6 million in the previous quarter, according to government data cited by the site: 6.55 million came from Baowu-Winning and 2.16 million from Simfer.

For buyers of Chinese steel, the backdrop is weak prices. Chinese steel ended the third quarter with prices at their lowest level in ten years, and the ores sub-index of the CFLP commodity price index is expected to end 2026 down 7.4%.

CSP view: more high-grade ore under the control of a Chinese steelmaker strengthens Chinese mills’ hand in buying raw materials and makes it less likely that iron ore becomes an argument for raising Chinese steel prices in the short term. For Brazilian iron ore exporters, Simandou competes in the same high-grade segment sold to China, and the second line’s pace is a variable to watch in 2027 negotiations. The 60 million tonnes are planned capacity, not output. This reading is ours, not Baowu’s.