Simandou costings and comparatives- help wanted!29 Jul 2024 20:56
Having recently noted the competitive advantage Zanaga has over GenMin’s Bakamla in Gabon thanks to its slurry pipeline (vs a rail solution), I’m trying to get a handle on more direct competitor Simandou’s logistics costs.
Does anyone have input re its comparatives?
To recap, the ZIOC FS update shows
-$ 2.40 (slurry) + $ 6.50(port) for Phase 1 transport costs of $ 8.90 per ton,
-$ 2.10 + $ 2.70 total $ 4.80 transport costs per ton for Phase 2
ZIOC’s capex is $2.2Bn + $ 2.5 BN, total $ 4.7 Bn
Simandou’s capex is harder to work out, being split :
(a) Simfer (RTZ) consortium : 60 mtpa mine + 70 Km rail spur + 60Mtpa Transshipment Vessel (TSV) port;
(b) Winning (WCS) consortium : 60 mtpa mine + 16 Km rail spur + 536 Km main rail (235 bridges over 70Km) + 60 mtpa Barge port.
Railway said to be 20-30% complete, 9 x Chinese contractors currently at work on different sections at the same time.
RTZ’s share of the ‘CTG pooled logistics’ appears to be $ 6.5 Bn ; it has been carrying the Chinese, who paid $410m due 2023 in Jun 24 and $ 575m incurred so far this year only in July 2024.
Both consortia hope to start exports (slowly) late 2025, starting with material already being stock-piled from site preparation. WCS will start 1st as its at the end of the line.
There’s some doubt whether either will achieve its intended 60mtpa of exports because (a) nameplate theoretical rail capacity of 160 mtpa includes 40m of Third Party Use agreements; and (b) more critically, river width is already a constraint : the (second) TSV Port is needed, because the inland barge port alone couldn’t handle the 120 mtpa volume.
To my surprise, there’s NO deepwater port included at this stage (on additional – unquantified - Capex grounds).
RTZ is expecting to achieve :
- IRR of 11 to 13% post tax;
- ZIOC claims IRR of 26.2%(Ph 1) to 28.2 %(Ph 2), tax status unclear;
- $ 230 per tonne capital intensity (said to be 4x-5x W Australia cost ; 2 x Rhodes Ridge cost). Based on $ 13.8 Bn for 60mtpa.It was described by management, somewhat defensively, as ‘like an LNG project’….
On the same basis, @ $4.7Bn for 30mtpa, ZIOC’s capital intensity is approx. $ 160 per tonne; with possibility of lowering further if e.g. the Floating Port option is implemented.
Does anyone have other - or more accurate - comparatives ?
Meanwhile, in other topical news, Guinea's military junta appears to have backslid on promised return to civilian rule :
From depeches :
."GUINEA
The political transition will not end on 31 December this year
The date of 31 December 2024 will not mark the end of the transition that has been underway in Guinea since the army seized power, on 5 September 2021, declared General Amara Camara, Secretary General of the Guinean Presidency, on 25 July..."
GLA
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