Rio Tinto Ltd (ASX:RIO) (LSE:RIO, ASX:RIO, OTC:RTNTF) SimFer mine in Simandou, Guinea, appears increasingly unlikely to meet its 2025 first production target, according to satellite image analysis by experts at UBS.
The ambitious project, which includes a mine, a 630-kilometre railway, and a port, is facing growing risks of delays due to incomplete construction, a recent fatality, extreme rainfall, and political uncertainty in Guinea.
Despite Rio Tinto’s recent assurances that progress continues, UBS notes that the satellite evidence paints a more complex picture. Construction at key sites, including the railway and mine blocks, remains behind schedule.
Although early works at the mine have begun and railway sleepers are being laid, significant gaps remain. Only 78 of the planned 206 railway bridges are under construction, and tunnel excavation is only halfway complete, a critical bottleneck for the project.
The scale of the remaining work raises doubts about Rio Tinto’s ability to meet its timeline. Activity at mine blocks 1 and 2 has been minimal, with only limited progress observed at crushers, stackers, and loaders.
At mine blocks 3 and 4, construction at the process plant has been similarly modest. Meanwhile, port construction has been halted following a fatality in October, with authorities suspending activity to conduct a thorough investigation.
Simandou faces additional hurdles beyond construction delays. Record-breaking rainfall during Guinea’s 2024 wet season disrupted progress, with rainfall levels up 40% year-on-year.
UBS warns that similar conditions could cause further setbacks in 2025. Political instability also looms large, as Guinea’s military government has delayed a return to civilian rule until at least 2025, raising concerns over potential protests and disruptions.
Rio Tinto is expected to provide an update on the project at its Investor Seminar on December 4.
While the company has stated that exports in 2025 will be minimal, UBS suggests that the timeline for a full ramp-up to 60 million tonnes per year could extend well into 2026, with ongoing challenges potentially limiting exports during that period.
In afternoon trading, the shares were range-bound at 4,882.5p.