China's State-owned Assets Supervision and Administration Committee is currently reviewing plans by Chinese companies for Guinea's giant Simandou iron ore deposit, Kallanish notes. The approval from SASAC is expected to be issued soon, boosting China's moves to increase control of overseas resources.

The Simandou iron deposit has proven to be the world's largest untapped iron ore resource. Its ore reserves are estimated to be more than 2.4 billion tonnes, with around 65% iron content. 

In 2019, a Chinese-backed consortium of Guinea's Société Minière de Boke (SMB) and Singapore's Winning won a tender to develop blocks 1 and 2 of Simandou. The main investors in SMB-Winning include Chinese aluminium producer Shandong Weiqiao Group and Shandong Yantai Port Group, while the Guinean government owns 10%.

SMB offered to invest $14 billion last year thus beat Australian miner FMG with an offer price of $9 billion. Analysts estimate however that bringing the project to life could cost over $20 billion. The main cost will be used to build a 650-kilometre railway and deep-water port to transport the iron ore from the southeast corner of Guinea to the coast for export.

Blocks 3 and 4 of the mine are owned by a joint venture of Rio Tinto, China Aluminium Corp (Chinalco), and the Guinean government. Rio Tinto is actively planning to develop them as holding 45% of stake. Chinalco and Guinea government hold 40% and 15% of the stake in Block 3 and 4, respectively.

The excavation of the mine could further stabilise China's iron ore supply and help cushion China from events such as the 2019 supply crunch caused by the Vale dam disaster in Brazil. However, Chinese companies cannot see benefits in the near term as the project will have to include significant infrastructure building requirements. Both Iron ore prices and Chinese demand are expected to be lower by the time the project ships its first ore.