Can Simandou forge a new Guinean economy?

Even in Conakry's most polished hotels and ministries, power outages are a daily reminder that a country with ambitions for energy‑hungry steel mills still struggles to power basic services. For Guinea's citizens, it is the key question hanging over the Simandou iron project: can the government muster the energy to turn its mineral windfall into the foundation of a modern industrial economy?

"It is not enough to export rocks," says minister of planning Ismaël Nabé. "The real opportunity is to build industries that endure."

The first step is pelletisation - compressing crushed ore into uniform pellets suitable for direct reduction or smelting. This process reduces impurities and lowers the amount of energy required to make steel.

Simandou's exceptionally high-grade ore makes this processing highly efficient. In fact, this is one of the few iron deposits globally for which "green steel" is viable, partly due to Guinea's renewable energy potential. Sometimes described as West Africa's water tower, Guinea's rivers tumble from the highlands into the Gambia, Senegal and Niger. But, for all its hydro power potential, Guinea generates only 1,200 MW to 1,300 MW, far shy of the 10,000 MW targeted under the government's Simandou 2040 economic programme. Several dams face delays and transmission infrastructure remains limited.

"Simandou is the biggest mining project in the world - of course it needs power on a scale we've never had," mines minister Bouna Sylla says. "That is why value addition must come in phases."

Phase one involves exporting the raw ore. Phase two is pelletisation, powered by hydro and solar. The third phase - smelting - will come only once power infrastructure is in place.

Simandou's $30bn pla

All told, Simandou's mine, rail and port and a broader industrial pla - including the first wave of power generation and grid upgrades - will cost an estimated $30bn to $35bn. Some of this funding should come from the launch of a new sovereign wealth fund starting next year.

This fund is designed in part to stabilise the exchange rate by absorbing foreign-exchange inflows and investing the money in industrialisation. International governance standards will help prevent currency swings, says Mamadou Nagnalen Barry, chairman of Compagnie du TransGuinée (CTG), the state holding company for Guinea's interests in Simandou.

Guinea is also exploring new funding channels: Islamic finance, Samurai bonds, diaspora bonds and infrastructure vehicles are all on the table, according to minister Nabé. Diversifying financing mechanisms is essential to underpinning long-term industrialisation, he says.

Beyond ore

Guinea's roadmap for eventual steel production mirrors its other big mining activity: bauxite. The world's largest exporter of the key ingredient for alumina, Guinea lacks a refinery for processing.

With rail access, grid expansion and new port capacity, Guinea hopes to become a regional metals hub exporting semi‑finished and then finished goods. "We must transform here," says Sylla. "Alumina, steel - these are the industries that will give Guinea real economic power."

Along the 600 km rail line, planners have mapped industrial zones for agro‑processing, logistics and manufacturing.

Agriculture may be the earliest winner. Cold-chain facilities at the port of Morébaya will allow produce from upper Guinea to get to markets far more efficiently via improved logistics at the port.

"This railway is not only for iron," says Nabé. "It is for Guinea."

When the power flicks back on in Conakry, the city exhales. The moment captures the contradiction between Guinea's resource wealth and poor infrastructure.

While, ultimately, Guinea wants Simandou to become what oil was for the Gulf - a generational catalyst - success will depend on reliable energy, financial discipline, political stability and the remobilisation of a vast workforce.