Iron ore shakeup begins as Simandou’s first boat heads for China

The first commercial shipment of iron ore from a massive new mine in Guinea is on its way to China, marking the start of a major shift in global supply of the steelmaking material.

The Winning Youth vessel — loaded with iron ore from the $23 billion Simandou mine — set sail on Tuesday evening from the West African nation, according to data from ship-tracker Kpler. It‘s expected to reach China by mid-January, data showed.

Simandou’s huge scale means its supplies will upend the iron ore trade, with high-grade reserves that offer top consumer China an alternative to the dominant flows from Australia and Brazil. The mine, which is split into four blocks involving Rio Tinto, Winning Consortium Simandou and other Chinese firms, is aiming for an ambitious full ramp-up over the next 2.5 years.

The shipment comes three weeks after an opening ceremony that marked the start of barge-loading, which precedes the transfer of material onto full-size Capesize ships. The time it took to load this first vessel highlights anticipated operational challenges as exports ramp up.

The project has also jolted freight markets, shipbrokers say, spiking demand for cargo space on Capesizes and nudging their daily earnings to new highs. An index of weighted averages of earnings on main Capesize routes, as compiled by the Baltic Exchange, reached $38,427 per day on Tuesday, its highest in two years.

The Winning Youth departed from the Morebaya port in Guinea that was specially built for Simandou iron ore, and is heading to the Majishan port in China’s eastern province of Zhejiang.

(By Katharine Gemmell and Weilun Soon)

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