Point of view: New mines will increase productivity, improve the quality of iron ore in Rio de Janeiro
British-Australian mining company Rio Tinto expects production at its new Simandou mine in Guinea to boost total iron ore production in the coming years, while expansion at another BHP company's Samarco mine in Brazil could lead to similar results.
Rio Tinto's average iron ore sales this year dropped to a ten-year low and amounted to about 60.5%. This is evidenced by Rio Tinto's presentation on Capital Markets Day in 2025. But the company expects that by 2032, at the high-grade Simandou mine in Guinea, the average ore content in the product will increase to about 61.7%.
The company lowered the technical specifications of[url=https://direct.argusmedia.com/newsandanalysis/article/2688237]Pilbara Blend fine ore from 61.6% Fe to 60.8% Fe in May. During 2024, the company also increased sales of lower-grade ore SP10, which contains less iron and more impurities.
BHP is in a similar situation to Rio Tinto. In recent years, the iron content in the ore, typical for an Australian company, has decreased, dropping below 62%. However, the increase in production at Samarco's high-grade facilities in 2025 probably affected the total ore content in the ore.
BHP has not announced any long-term forecasts for the iron content in the ore. But Samarco's planned production increase, which is expected to average 67% Fe in the current fiscal year, is likely to improve quality.
Simandou
Rio Tinto opened Simandou in November and shipped the first batch of ore in early December. This will increase production at the site to 60 million tons per year, which is equivalent to about 18% of the ore production in Western Australia in 2024, by 2028.
The company plans to sell 5-10 million tons of high-quality ore, which will be obtained from the mine in 2026, and production will increase to 60 million tons per year by 2028.
Simandou will account for about 15% of Rio Tinto's total production at this stage, with production from the Pilbara and Canadian mines becoming more and more high-quality. the rest is accounted for by plants.
Samarco
BHP plans to produce 7-7.5 million tons of 67% Fe iron ore pellets at Samarco during the 2025-2026 fiscal year through June 30, and then increase capacity to 30 million tons per year by 2028.
The Company's entire equity-based production growth in July-September was provided by Samarco. During the quarter, 2.1 million tons of ore were mined, compared with 1.3 million tons a year earlier.
The increase in Samarco production should boost BHP's average iron ore production over the next few years, despite lower production levels in the Pilbara.
Samarco will also expand BHP's customer base. The Kpler marine tracking platform estimates that in 2024, about 90% of the major