Hogan Lovells advises China Baowu on the closing of its investment in the largest mining and infrastructure project in Africa
After years of strenuous negotiations and a pressing work schedule, the co-development of the landmark Simandou mining and infrastructure project in the Republic of Guinea is finally a reality. Global law firm Hogan Lovells has advised its longstanding client, the world’s largest steelmaker, China Baowu Steel Group (Baowu) on all aspects of its investment in the mining and infrastructure components of the project (please also refer to our previous press release here).The closing of Baowu's investment occurred on 19 June 2024, followed by the closing of Simfer's investment on 17 July 2024.
Simandou is the world's largest undeveloped, high-grade iron ore reserve. The Simandou project stands as the largest mining and infrastructure project in Africa and in the world with a total required investment of reportedly US$15 -20billion. It encompasses four mining blocks, two ports, and a 600+ km railway line crossing the entire country connecting the mines to the ports. The multi-user railway infrastructure is expected to provide connectivity to passengers, small businesses and other industrial users across the country and will have a transformative impact on the Guinean economy.
The owners of the mines and the co-developers of the infrastructure are, on the one hand, a joint venture between Baowu and Winning Consortium Simandou (WCS, a consortium comprising Asian investors including Winning International Group and Shandong Weiqiao Pioneering Group) and, on the other hand, Simfer (a joint venture between mining giant Rio Tinto and a consortium of Chinese investors led by Chinalco, the world's largest aluminum producer).
As a strategic project between China and the Republic of Guinea, Simandou is planned to produce 120 million tons of high grade iron ore annually. Its successful development will have a transformative impact on the Guinean economy and its people, and bring green solutions to the steel making industry in China and around the world.
To assist Baowu on this deal, Hogan Lovells have deployed a global cross-practice and cross-office team comprising dozens of lawyers led by Liang Xu (M&A partner, Beijing) from the firm's Beijing, Shanghai, Hong Kong, Singapore, London, Paris and Washington D.C. offices, supported also by colleagues from Germany and Poland.
Liang Xu commented: "We are very proud to have supported Baowu in achieving the closing of its investment in the Simandou project, which represents a historical achievement for the Simandou project and the Republic of Guinea. Our cross-practice, cross-office team looks forward to continuing supporting Baowu and its partners to complete the construction of the project and put it into operation. We feel immensely grateful to have had the opportunity to work on this transformative project."
This deal, and the composition of the Hogan Lovells team, is a testament to the firm's ability to work seamlessly as a single integrated team across offices and practice groups. It also fits within the firm's strategy and vision in China and Africa, with the mining and infrastructure sectors at its core.
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