hina is close to giving the go-ahead for some of its biggest state-owned companies to develop the giant Simandou iron ore mine in Guinea, potentially paving the way for the project to be built after years of legal wrangling.\r\n\r\nChina\u2019s State-owned Assets Supervision and Administration Commission, which oversees the biggest government-owned enterprises, is actively pushing forward with the project, the world\u2019s biggest untapped iron ore deposit, according to people familiar with the plans who asked not to be identified as the talks are private.\r\n\r\nFor years, it seemed the super-rich ore under a jungle-covered mountain range might never be dug up. Simandou was practically forgotten by the wider mining industry as owners including Rio Tinto Group, Israeli billionaire Beny Steinmetz and authorities in the West African nation fought over rights to develop it.\r\n\r\nThat all changed in 2019 after Steinmetz ended a seven-year dispute with Guinea\u2019s government that saw him relinquish claims on half of the mine. It\u2019s now in the hands of a Guinean-led and Chinese-backed consortium that wants production to start within five years.\r\n\r\nThe reemergence of Simandou has spooked executives at the top iron ore miners. Half of the project could deliver more than 100 million tons a year of the highest quality ore just as the outlook for the material sours and Chinese demand plateaus.\r\n\r\nSimandou is divided into four blocks, with blocks 1 and 2 controlled by a consortium backed by Chinese and Singaporean companies, while\u00a0Rio Tinto Plc\u00a0and\u00a0Aluminum Corp. of China, known as Chinalco, own blocks 3 and 4.\r\n\r\nChina is keen to help develop the deposit as it looks to secure more high-quality supplies, and also wants to expand its footprint in West Africa, according to the people. SASAC hasn\u2019t formally approved the project, but is working out the details on how it will proceed and how the project will be funded, the people said.\r\n\r\nChinalco will be involved in the development and SASAC is talking to other state-owned enterprises about building costly port and rail infrastructure, the people said. China Development Bank is likely to provide some of the funding and Asian Infrastructure Investment Bank is also being considered, the people said.\r\n\r\nNobody immediately answered faxes or calls to SASAC, Chinalco or China Development Bank seeking comment.\r\n\r\nThe cost of building a 650-kilometer (400-mile) railway stretching across Guinea has always been a roadblock for developers, with estimates reaching as high as\u00a0$13 billion. With Chinese funding, the project becomes much more feasible.\r\n\r\nChinese involvement in Simandou would create a dilemma for Rio. A rival developing the deposit would threaten the market for Rio\u2019s most important commodity. Yet it could struggle to win shareholder support to pour billions of dollars into Guinea if it wanted to join the development.\r\n\r\nRio\u2019s Chief Executive Officer Jean-Sebastien Jacques met in January in Beijing with SASAC\u2019s chairman to discuss bolstering cooperation between the mining giant and China\u2019s state-owned groups, according to a statement from the company.\r\n\r\nThe largest iron ore exporters, including Vale SA, expect a long-term shift by China\u2019s mills to favor higher-quality raw materials, even as growth in steel output plateaus. Using premium grade ores can allow plants to boost efficiency and comply with tougher curbs on pollution. Simandou\u2019s ores contain 65% to 66% iron, above the industry\u2019s benchmark 62% iron content products, according to Rio filings.