September 11, 2012
Posted By Beethika Biswas ( Content Editor ) at 4:56 am

It’s an irony that some of the poorest countries in the world posses richest bauxite reserves. Africa, though poorly explored as of date, does posses some of the richest reserves of Gibbsitic bauxite. The known reserves are mostly concentrated in Guinea, Ghana, Jamaica and Sierra Leone but there are vast areas lying between tropic of Cancer and tropic of Capricorn that are yet to be explored and exploited. Despite so, around 16% of the total bauxite production of the world has been coming from the African mining industry. Despite the political unrest and overall under development in the region, African countries are providing feedstock to some the world’s most significant aluminium producers and a large number of them are taking a serious look at developing some major production bases in the region.

Guinea: the Bauxite Hub
Next to Australia, Guinea is the most significant Bauxite supplier to the world. Guinean bauxite has 30% share in world’s bauxite reserves and accounts for 94% of African bauxite production, Ghana accounting for most of the rest. Guinea has a total bauxite reserve of 20,900 mln tons out of which 7400 mln tons have been explored and evaluated. Guinea continues to be world’s leading bauxite exporter also.

The main Players and Projects
Guinea’s economy relies heavily on the mining industry, especially the bauxite mining sector. Its mining resource have been attracting large investment from companies like Rio Tinto, Vale and RUSAL. Mining industry’s contributors into country’s income is around 25%. Consistent attempts have been made during past few years to reorganize and modernize the aluminium industry there in order to increase productivity and profitability. Guinean bauxite is mainly obtained from three open pit mines of Sangaredi, Kindia and Fria in the Boke Bauxite Belt. Boke Bauxite Belt in Guinea contains the world’s largest and highest quality bauxite deposits with 40 -60% alumina grades. Rio Tinto has a share in the Boke deposit in Guinea, which produces about 12 million tonnes bauxite annually. Compagnie des Bauxites de Guinée (CBG), a joint venture between Government and HALCO produces the majority of Guinea’s bauxite from Sangaredi. The company has an annual production capacity of 14 million tons. Alcoa is 45% shareholder of Halco Mining and owns 51% share of CBG.
Government of Guinea had been operating Friguia bauxite-alumina complex at Fria on behalf of Alumina Company of Guinea (ACG). The management of the Alumina Company of Guinea was taken over by RUSAL for 22 years in 2002. Since then Friguia bauxite-alumina complex has been managed by RUSAL and since has been fully privatized in the year 2006. It has an annual production capacity of 618,000 tonnes of alumina and 2.1 million tonnes of bauxite. The facility plans to raise the alumina output to 800 thousand tonnes per annum by the end of 2013. However, the Friguia refinery has been disturbed and suspended since April 2012 on account of various socio political problems of the region.
Kindia has an estimated 30 Mt of bauxite reserves. RUSAL manages the state owned Societé des Bauxites de Kindia (SBK) and operates the Kindia mining on behalf. More reserves are also located nearby at Dian Dian.
Recently, bauxite miner Alufer Mining has announced plans to invest $400 million to develop its Bel Air bauxite project in Guinea’s Boffa region. Alufer has received mining exploration permits in the Boffa, Labe and Kindia regions of Guinea with a combined potential reserve of over 3 billion tonnes of the aluminium ore. According to the company documents, the company plans to build a mine with a capacity of 10 million tonnes per year by 2014. Guinea, however, is making sure that all mining firms comply with its recently revised mining code.

Output Growth
According to a 2001 statistics, Guinea’s mine output includes 17.95 million tons wet-basis bauxite, 15.7 million tons dry-basis bauxite and 100,000 tons calcined bauxite.
According to the government sources of Guinea, despite the slowing global demand and work disturbances due to labour and civil disturbances, Guinea’s bauxite and alumina output rose to a considerable extent in 2011. According to the finance ministry reports, Bauxite production rose more than 9 percent to 17.5 million tonnes, while alumina output rose more than 3 percent to 631,000 tonnes.
According to the finance ministry report, the increase in alumina production from RUSAL’s Friguia alumina refinery was lesser than expected in 2011/12 due to labour disputes. Below is the table that shows Guinea’s bauxite production in the last three years:

Minerals                2011            2010          2009          
Bauxite (tonnes)     17,593,100     16,054,100    14,741,600 

Foreign Investment and Local Disturbances
Since Guinea’s economy relies heavily on its mining sector, Government has been encouraging foreign investment in the bauxite sector. However, Political instability, frequent strikes by miners, demonstrations and ethnic group tensions are adversely affecting the investment climate. In addition to the political, social and economic risks associated with the country, lack of availability of finances for small scale mining companies as well as, civil disturbances in neighboring countries of Guinea-Bissau, Senegal, and Sierra Leone are creating a hurdle in attracting more foreign investors.

Friguia alumina refinery strike
Economic growth of Guinea is getting adversely affected since 2012 by the strikes over pay and at the Friguia alumina refinery. The Russian owners left the refinery after the dispute, leading to a complete suspension of its operation. The refinery employs around 3,000 town residents and provides water and electricity to the town. All that is in jeopardy now and it is affecting the bauxite mining sector adversely.

The bottom Line
Guinea ended two years of military rule with presidential elections in late 2010, but the country is yet to start legislative election. Elections, originally scheduled for 8 July 2012, have been postponed indefinitely due to political unrest. Analysts say a range of judiciary reforms and anti-poverty measures need to be taken up urgently to improve the situation there. A new mining code has already been established to invite investment for development. According to the new code, the government will take over 15 percent shares of ownership in companies at no charge and with an option of buying another 20 percent, allowing the state to control up to 35 percent in commodity companies. All new projects are to conform to the new mining codes and it can be hoped that all this would turn out to be a productive and economically viable arrangement for the aluminium companies as well as the host country. Hopefully, the success of the new model in Guinea would open up the African region as a center for prime investments in bauxite, alumina and the entire eco-system of Aluminium industry.
Reference:

http://www.mapsofworld.com/minerals/world-bauxite-producers.html http://www.guinea-mining.com/mineral resources.htm http://af.reuters.com/article/metalsNews/idAFL6E8I95L920120709

http://www.nationsencyclopedia.com/Africa/Guinea-MINING.html

http://www.reuters.com/article/2012/02/20/guinea-mining-output-idUSL5E8DK6QS20120220

http://www.alcoa.com/guinea/en/home.asp

http://www.rnw.nl/africa/bulletin/guinea-town-paralysed-pay-strike-shuts-aluminium-plant

3 comments posted so far

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  • Dear Sirs ,

    We are in to mining and Import of Stem Coal and Importing to tune of 2.5 MMT/Annum . We would like to venture in to Bauxite Ore of Guinea (West Africa ) origin being High quality having 48-50 % Alumina with low moisture and Low Reactive Silica percentage of about 1 to 1.5 %.

    We need to import the Bauxite Ore of Guinea-Conakry ( West Africa ) origin to the tune of 100,000Mt. per month either on FOB or CIF Trade basis for India .
    Trust to get your feedback soon on the captioned requirement.

    Thanks & Regards,
    Ajay Gupta
    Vice President
    (Sales & Mrktg)
    +91 87904 22289

    4th,Floor ,My Home Jupally
    Greenland ,Ameerpet
    Hyderabad (India)

  • Dear sir,
    AlCircle blog is our open forum for discussion for aluminium industry professionals. For your business requirements, we would request you to upload your leads on the Business Circle page of AlCircle. You need to get registered to the portal and post your business leads under Business Circle. Or you can send your details/requirements to info@alcircle.com. Your lead will reach out to our global visitors from the aluminum industry.

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