Another headache for China

China imports around half of her bauxite from Guinea, massive risks and uncertainties over there. No wonder China is looking at supply diversification to ensure supply security. A world class bauxite project in a politically stable country, will China let go of it? DYOR.

The construction of bauxite refineries in Guinea opposes the State and the mining companies

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  Creation date: Jun 13, 2022 5:22 pm
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  Last modified on: June 13, 2022 7:00 PM

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(Ecofin Agency) - Guinea is home to the world's largest bauxite reserves and is the second largest producer of this mineral, which is essential for the production of aluminium. However, the country does not process the raw material and therefore cannot benefit from the benefits associated with this stage of the value chain.

In Guinea, the construction of bauxite refineries is about to become the subject of a showdown between the government and the mining companies. The Council of Ministers meeting on Thursday June 9 noted the end of the moratorium granted at the beginning of April to aluminum ore operators by President Mamadi Doumbouya, without any of them having submitted plans for the transformation of the production in the country.

“  Consequently, the President of the Transition has instructed the Minister of Mines and Geology to notify the companies concerned that from the receipt of the letter which will be sent to them, that they have a period of 10 days, to send their timetable  , ” says a government press release published on June 10.

While the Conakry authorities' request does not seem to be receiving a favorable response from the mining companies for the moment, neither has any of them communicated officially to oppose it. It must be said that the situation is quite delicate, between the signed with the Guinean State which effectively provide for the development of a local processing industry, and the real agreements on the ground.

Building refineries means committing multi-million dollar investments in a jurisdiction that many analysts consider “  at risk  ”. Moreover, the availability of electrical energy represents another constraint with which the operators must deal, even if the insufficiency of the national network can be overcome thanks to the construction of independent power stations (solar, hydroelectric or coal).

“  Refinery projects in Guinea only benefit from their bauxite, as all other raw material needs, such as energy and caustic soda, must be imported  ,” says Anthony Everiss, senior consultant at CRU firm quoted by Reuters . .

Be that as it may, the next few weeks should bring more elements to this case, because, after all, the Guinean State is in a position of strength. The country is the world's second largest producer of bauxite and the first in terms of reserves.

Emiliano Tossou

https://www-agenceecofin-com.translate.goog/gestion-publique/1306-98654-la-construction-de-raffineries-de-bauxite-en-guinee-oppose-l-etat-et-les-compagnies-minieres?_x_tr_sl=fr&_x_tr_tl=en&_x_tr_hl=en&_x_tr_pto=sc