The commencement of exports from Simandou in Guinea, the world’s largest undeveloped high-grade iron ore deposit, could cause realignments in the bulk carrier market, according to a post by Howe Robinson. The first cargo was transported via the Capesize “Winning Youth”, inaugurating a new demand for ton-miles from West Africa to Asia.
Simandou, approximately 600 km from the port of Morebaya, has a production capacity of 130 million tons, which is expected to be achieved within 30 months. According to Rio Tinto, the four blocks of Simandou are expected to produce 22-24 million tons in 2025 and up to 60 million tons in 2027. This translates to a need for 20-22 additional Capesizes as early as next year.
Simultaneously, increased bauxite exports from Guinea to China may create a need for up to eight additional Capesizes in order to meet demand. At the same time, the enhanced volumes from Sierra Leone and Mauritania suggest that a significant portion of the 48 newbuilding Capesizes for delivery in 2026 could be absorbed by this development.
West Africa has already increased its share in the global Capesize trade to 9.5% (from just over 4% in 2020-21), a percentage that could reach 18% when Simandou reaches full production. However, the vessels in question are showing an average waiting time of up to 15 days in Guinea this year, significantly higher than in Brazil (7.5 days) and Australia (7 days).
