SYLLA & PARTNERS assisted, through an international law firm, the Government of the Republic of Guinea in negotiating and drafting the Investment Framework for the Simandou South project (Blocks 3 and 4). The estimated infrastructure cost is 20 billion US dollars.
The Investment Framework comprises two major legal instruments: the amended and consolidated Base Convention for the operation of the Simandou iron ore deposit on one hand, and the BOT (Build-Operate-Transfer) Convention relating to the construction of railway, port and auxiliary infrastructure on the other hand.
The Simandou project represents the largest integrated mining and infrastructure project ever undertaken in Africa. The Simandou iron ore deposit, located in southeastern Guinea, contains one of the world’s largest reserves of high-grade iron ore. The development of this deposit requires the construction of massive infrastructure including a railway of several hundred kilometers and a deep-water port.
The project is led by SIMFER, a company whose capital is held by Rio Tinto (46.6%), Chinalco (41.3%), the International Finance Corporation (4.6%) and the Government of Guinea (7.5%). This unique shareholding structure brings together two of the world’s largest mining companies, the World Bank Group’s development finance institution and the Guinean State.
Negotiating and drafting the Investment Framework for a project of this magnitude represented a considerable legal and technical challenge. The Base Convention had to define all rights and obligations relating to the operation of the iron ore deposit, including fiscal, environmental, social and governance aspects.
The BOT Convention, meanwhile, established the framework for the construction, operation and eventual transfer of railway and port infrastructure. This BOT approach enabled mobilization of private investments necessary for this massive infrastructure while providing for its subsequent transfer to the Guinean State or a public entity.
Our firm provided its in-depth local expertise in Guinean law within an international consortium of legal advisors, mobilizing our knowledge of mining law, infrastructure and project finance.
The services performed by SYLLA & PARTNERS included active participation in negotiations of the Investment Framework with Rio Tinto, Chinalco and IFC, contribution to drafting the amended and consolidated Base Convention for operation of the iron ore deposit, contribution to drafting the BOT Convention relating to construction of railway, port and auxiliary infrastructure, advice on all Guinean law aspects relevant to the project, as well as coordination with the international law firm to ensure overall coherence of the Investment Framework.
This type of assignment illustrates our ability to participate in negotiations for the most complex and important mining and infrastructure projects at the continental level, providing essential local expertise for legal security of these historic operations.
The SYLLA & PARTNERS team was led by Pierre Kodjo AVODE and Mohamed Sidiki SYLLA, assisted by Madigbè KABA.
To discover other major mining projects that our firm has completed in Guinea, visit our references page. For any questions regarding our services in negotiating investment frameworks for integrated projects, please do not hesitate to contact us.