Simandou is the world's largest and richest undeveloped iron-ore deposits in the world (Photo: Rio Tinto Plc)

Simandou is the world's largest and richest undeveloped iron-ore deposits in the world (Photo: Rio Tinto Plc)

According to reports this morning, the world's largest steel maker (ArcelorMittal) and the world's largest mining company (Glencore Plc) are two of the parties interested in bidding for a piece of the Simandou iron-ore project in Guinea which is the biggest undeveloped iron-ore projects on the planet.

The Simandou project has been somewhat of a 'white buffalo' and has been shrouded in controversy.  It was seized from Israeli billionaire Beny Steinmetz earlier this year after his questionable acquisition of the rights to Simandou and its iron-ore riches that lay in the mountains there.

Iron-ore behemoth Rio Tinto maintains ownership of blocks 3 and 4 while the rights to blocks 1 and 2 were stripped from the London-based company in 2008 by the government of Guinea and given to Steinmetz for free.

According to Rio Tinto's website, they have invested in excess of US$3 billion of which US$1 billion was allocated to infrastructure requirements.

In April, Rio Tinto sued Vale and Steinmetz amid accusations of bribery and corruption.  Guinea has since revoked the rights to half of Simandou which were controlled Vale and Steinmetz's BSG Resources under a joint venture partnership.

The New Yorker has a great piece out called "Two Mining Behemoths Battle an Israeli Billionaire" which outlines the saga between Rio, Vale and Steinmetz.

- Beny Steinmetz (Photo: Shaun Curry)

- Beny Steinmetz (Photo: Shaun Curry)

Today, Vale announced a $500 million impairment charge related to Simandou in their quarterly report.  BSG Resources and Vale had outlined a $10 billion infrastructure and mine plan.

The fact that Glencore is even remotely interested in this project would come as a surprise to most.  Glencore's CEO, Ivan Glasenberg, has stated his company would not invest in large and expensive new development projects.

The government of Guinea has estimated the total cost to develop the project may cost in excess of $20 billion and would include a 650km rail  line as well as port facilities.

According to the Bloomberg report, “the government of Guinea is confident of a strong line up of interested parties in the Simandou concession,” claims an external spokesman for the government.

ArcelorMittal is seeking to expand its iron-ore business and is currently in talks with BHP Billiton on the Nimba mine which is also located in Guinea.

Rio Tinto believes Simandou could be operational by 2018, producing 100 million metric tons of iron-ore or roughly 8% of the world's iron-ore demand.

Read: Mittal, Glencore Said to Be Among Potential Simandou Bids