* SMB-Winning offered $14 bln for mine and infrastructure
* Fortescue put $9 bln on the table, not including railway & port
* Infrastructure investment was critical in tender decision
* World's largest iron ore deposit was mired in legal disputes (Adds comments from government sources, bids)
CONAKRY, Nov 13 (Reuters) - A consortium of Guinea's Societe Miniere de Boke (SMB) and Singapore's Winning said on Wednesday it won a tender to develop blocks 1 and 2 of Guinea's giant Simandou iron ore project, edging out Australia's Fortescue in a $14 billion deal.
The consortium committed to developing the mine, which holds over 2 billion tonnes of high-grade ore, the largest known deposit of its kind, but which has been held up by legal disputes and high costs.
Guinea's government required prospective developers of Simandou to build a 650 km railway and deepwater port to transport the ore from the remote southeastern corner of Guinea to the coast for export.
The steep cost of that infrastructure had deterred miners from the otherwise attractive deposit.
SMB-Winning put $14 billion on the table to develop the blocks and build the infrastructure, according to a government source who asked not to be named because they are not authorised to speak on behalf of the mining ministry.
SMB-Winning chairman Fadi Wazni confirmed that figure.
Fortescue, meanwhile, offered $9 billion for the blocks but did not formally promise to build the railway dubbed the "Transguinéen", two government sources said.
Fortescue was not immediately available for comment outside Australian working hours. Simandou would have been its first venture on the African continent.
The issue of the Transguinéen was pivotal in the decision to grant the blocks to SMB-Winning, the government sources said.
"The Simandou Project will be crucial for Guinea's future. This mega deposit is an opportunity in terms of employment and wealth creation for the whole country," said Sun Xiushun, the chief executive of the consortium.
The two blocks became available after a settlement in February between Guinea's government and Israeli billionaire Beny Steinmetz's BSG Resources following a protracted legal dispute.
Blocks 3 and 4 of the mine are owned by a joint venture of Rio Tinto, China Aluminium Corp (Chinalco), and the Guinean government.
SMB-Winning's investors include Chinese aluminium producer Shandong Weiqiao and the Yantaï Port Group , while Guinea's government has a 10% stake.
The consortium is Guinea's leading exporter of bauxite, an aluminium ore. (Reporting by Saliou Samb in Conakry and Aaron Ross in Dakar, Writing by Helen Reid, Editing by Edward McAllister, Louise Heavens and Alexandra Hudson)