The board of Anglo-Australian mining giant Rio Tinto has approved what will be the world’s biggest mining project, CEO Jakob Stausholm told the Financial Times (FT) on Wednesday.

The company will invest $6.2bn in the Simandou mining project in West Africa, the world’s largest untapped high-grade iron ore deposit. Funding will go towards the construction of a 552km railway to transport high-grade iron ore from two new mines in the Simandou mountains to a new deep-water port on Guinea’s Atlantic coast. One of the mines will also be built and operated by Rio Tinto.

“The board yesterday sanctioned the biggest mining project in the world,” Stausholm told the FT. “Early November I was out there. I flew over the rail line, the mines and the port in a helicopter, it is amazing what has happened,” he said, adding that tunnels along the rail corridor have already been prepared and materials for construction ordered.

The company said in January it expects to begin infrastructure work on the project this year after almost three decades of setbacks and corruption scandals, with production of iron ore potentially beginning as soon as 2025.

Rio Tinto’s state-owned Chinese partners on the project include Chinalco, the world’s biggest aluminium producer, and Baowu, the world’s largest steel producer. The two companies still require final investment approval from the Chinese Government, but Stausholm said he was “very confident” this would happen soon.

Baowu raised $1.4bn (10.07bn yuan) last month from a bond issue in China. It plans to use the funds to help finance the Simandou project, Stausholm said, adding that the Chinese Government was discussing funding with each state-owned company, which was “the last part of the process”.

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The announcement comes as Rio Tinto reported a drop in earnings for 2023. The company’s underlying earnings before tax, interest, depreciation and amortisation (EBITDA) were down 9% year-on-year, ending on $23.9bn, while sales revenue dropped to $54bn, down from $55.5bn in 2022. Total underlying profit also fell by 12%. The company trimmed its dividend for 2023 to $4.35 per share, down 12% from the previous year.

Despite a decline in results, which was caused in part by a global slump in commodity prices, Stausholm argued he had strengthened the company in his three years as chief executive. “I am very pleased that we as Rio Tinto can now, in a more unconstrained way, grab the opportunities in this world,” he said.

The company is also ramping up production at its Oyu Tolgoi underground copper mine in Mongolia, with a goal to produce 500,000 tonnes per year of the metal from 2028. Stausholm said that the global demand outlook for the metal is improving. He also said that demand from China for iron ore remains strong.

“The reality is… the physical economy of China is growing,” he said. “Steel mills are running flat out, demand is strong and you see a pick-up in demand in copper and aluminium from the very massive development of renewable energy and electrical vehicles [in the country].”