Guinea: Doumbouya orders mining companies to process local bauxite

By Jeune Afrique
Posted on Monday, 18 April 2022 10:51, updated on Wednesday, 20 April 2022 10:30

A technician at the "Compagnie des Bauxite de Guinée" plant in Kamsar in 2008. © AFP PHOTO / GEORGES GOBET

Mamadi Doumbouya has ordered foreign mining companies to build bauxite refineries to ensure fair revenue sharing.

A video on the presidency’s Facebook page captures a meeting that Colonel Mamadi Doumbouya held on 8 April, in which he gave companies until the end of May to submit proposals and a timetable for constructing bauxite refineries.

With an estimated 7.4 billion tonnes, Guinea has the world’s largest reserves of bauxite, a mineral used in the manufacture of aluminium, which is essential in the automotive and food industries, for example. The country is also the world’s second largest producer. China imports about half of its bauxite needs from Guinea.

Insufficient spinoffs

However, the benefits that Guinea garners from mining bauxite and other abundant natural resources, such as gold, iron and diamonds remain notoriously disproportionate. Experts cite insufficient investment in the development of a local economic fabric, lack of essential infrastructure, such as roads, rampant corruption and gaps in existing legislation.

“Despite the mining boom in the bauxite sector, it is clear that the expected revenues are below expectations, and […] we cannot continue this fool’s game that perpetuates great inequality in our relations,” Colonel Doumbouya told the industrialists.

Companies like Société Minière de Boké (SMB, a consortium formed by Singaporean shipowner Winning Shipping, Chinese aluminium producer Shandong Weiqiao and the Yantaï Port Group);  Compagnie des Bauxites de Guinée (CBG, 49% owned by the Guinean state and 51% by Halco Mining Inc, a consortium formed by US company Alcoa, Anglo-Australian Rio Tinto-Alcan, and Dadco Investments); and Russia’s Rusal, all operate in this sector.

Non-compliance with conventions

Doumbouya had invited representatives from a dozen companies and at least six were present.

According to Moussa Magassouba, the minister of mines, all these companies were required by the Guinean state’s conventions (since 1983 for CBG) to build refineries.

China’s TBEA, for instance, is supposed to build an aluminium smelter, he said, adding that some of these companies have not even produced a feasibility study.

The conventions have remained a “dead letter”, according to Doumbouya. Non-compliance with these conventions is a “cause of nullity” and their application is “non-negotiable” for the government, said the head of state. Transforming the ore on site “is becoming unavoidable, it is a necessity and must be done without delay”.

Before the end of May, he said: “I ask you to come back to the minister of mines and geology with proposals, a project, a precise timetable for constructing alumina refineries in the Republic of Guinea.” All the raw materials used in the manufacturing process must also be produced locally, he added.

Companies that violate refinery construction deadlines will face penalties, said Colonel Doumbouya, who had sought to reassure foreign operators when he took power by force in September 2021. He had provided assurances that Guinea would keep the commitments it had made.

However, in March, he ordered a halt to all activity at the huge Simandou iron ore deposit, demanding that national interests be safeguarded by its foreign operators, including SMB and Rio Tinto. A $15bn framework agreement was signed between the Guinean state and the operators in late March to co-develop the deposit.

(With AFP)

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