The company raised $1.4 billion by issuing three-year bonds. 70% of the capital is invested in an iron ore project in Guinea
The world's largest steelmaker, China Baowu Steel Group, raised 10 billion yuan ($1.4 billion) through a bond issue, in part for the large-scale Simandou iron ore project in China. Guinea. Nasdaq reports this with reference to the company's report on the Shanghai Stock Exchange.
The capital raised through the issuance of three-year bonds with a fixed rate and an annual coupon of 2.45% will be used for operating expenses, including debt amortization, working capital and project construction. At least 70% or around one billion dollars of the capital raised will be used to expand the northern blocks of Simandou.
The field is divided into four blocks. WCS (45% controlled by Winning International Group of Singapore and 35% by Weiqiao Aluminum, a unit of China Hongqiao Group) holds 85% of the shares in the northern part of Simandou – blocks 1 and 2. The southern part of the project, Blocks 3 and 4 are being developed by the multinational Rio Tinto and a joint venture between the Chinese companies Chinalco and Baowu. The project is expected to become the world's largest high-grade iron ore mine.
According to Baowu, the entire Simandou project will be completed and put into operation in 2026.
As the GMK Center previously reported, Guinea announced a tender for the development of the world's largest iron ore deposit, Simandou, in the summer of 2019. The country cannot develop the mine alone due to the high cost of developing the necessary infrastructure and protracted legal disputes. The deposit's reserves were estimated at 2 billion tons of high-quality ore.
Baowu Steel has joined a Singaporean consortium to develop the Simandou project in September 2022. Iron ore mining in Guinea is one of China's bets to reduce its dependence on iron ore suppliers in Australia and the Brazil.
In March 2023, the Guinean authorities and Simandou shareholders reached agreement on the terms of joint iron ore extraction. According to Lawrence Deschambenois, from Rio Tinto, the Simandou project has never been so close to completion.
