Factbox: Guinea's top minerals at risk after coup

China Hongqiao

06/09/2021 14:49

LONDON, Sept 6 (Reuters) - Guinea's special forces on Sunday
ousted the West African country's president, raising the
political and operational risk for its minerals, which include
bauxite, diamonds, iron ore and gold.
    Mining accounts for about 35% of GDP in Guinea and while the
West African country has large reserves, the development of many
of its minerals has been hobbled by a lack of infrastructure,
legal spats and alleged corruption.
    Land and air borders were reopened on Monday, a government
spokesperson said, but political risk on projects remains
elevated.  urn:newsml:reuters.com:*:nL8N2Q81UC
    Guinea also has mineral resources including cement, salt,
graphite, limestone, manganese, nickel and uranium.
    Below is a breakdown of the country's main minerals by
product. 
    
    BAUXITE
    Guinea is the world's second-largest producer of bauxite,
the main ore source of aluminium, much of which is destined to
be processed in China. 
    Guinea accounts for about 22% of the world's production,
producing 82 million tonnes of bauxite in 2020, according to the
U.S. Geological Survey (USGS). Guinea is home to the world's
largest reserves of bauxite at 7.4 billion tonnes.
    Societe Miniere de Boke (SMB) and Compagnie des Bauxites de
Guinee (CBG) are Guinea's top two bauxite producers.
    SMB is owned by a consortium including Singapore shipping
company Winning International Group, Shandong Weiqiao - a
subsidiary of the world's top private sector aluminium producer
China Hongqiao  1378.HK  - and Guinea's UMS International.
    CBG is 51% owned by consortium Halco Mining Inc and 49%
owned by the Guinean government. Rio Tinto  RIO.L  and Alcoa
Corp  AA.N  each hold 45% of Halco, while Dadco Investments
holds the rest.
    Based on USGS data, four tonnes of dried bauxite is required
to produce two tonnes of alumina, which in turn produces a tonne
of aluminium.
    Prices of Guinean bauxite for delivery to China
 AM-45GUI-BAUX  are at a near 18-month high.  urn:newsml:reuters.com:*:nL1N2Q80G5
    Guinea is China's top source for bauxite that it uses to
make aluminium, a big component in the making of automobiles and
beverage cans. 
    The potential disruption to supply helped to extend a rally
in aluminium prices  CMAL3  to a new 10-year high.  MET/L 
    Russia's Rusal  RUAL.MM   0486.HK , the world's third
largest aluminium producer behind China's Chinalco  601600.SS 
and Hongqiao  1378.HK , operates three bauxite mines and one
alumina refinery in Guinea.
    Those three bauxite mines account for 42% of Rusal's total
bauxite capacity.
    Rusal did not respond to a Reuters request for comment on
Monday.
    
    IRON ORE
    Guinea is home to the world's largest reserves of iron ore
but years of legal wrangling and alleged corruption over the
largest project Simandou, have left the minerals untapped.
    Simandou holds more than 2 billion tonnes of high-grade ore,
the largest known deposit of its kind. Iron ore is used to make
steel.
    China-backed consortium SMB-Winning plans to bring blocks 1
and 2 of Simandou into production by 2025.  urn:newsml:reuters.com:*:nL8N2H73R7
    Blocks 3 and 4 of Simandou are owned 45.05% by Rio Tinto,
with Chinalco holding 39.95% and Guinea's government holding
15%.          
    
    GOLD
    Guinea produced about 56.9 tonnes of gold in 2020, according
to the World Gold Council and is the seventh-largest miner of
the precious metal on the African continent.
    Russia-focused producer Nordgold operates one gold mine in
Guinea. Its Lefa mine, located 700 km northeast of Conakry,
accounted for 17% of Nordgold's total production in 2020.
    "To date, Nordgold remains unaffected by the current
political situation in Guinea and our mine site continue to
operate as normal," Nordgold said in a statement on Monday.
    AngloGold Ashanti  ANGJ.J  also said its Siguiri gold mine,
where it produced 214,000 ounces in 2020, was
unaffected. urn:newsml:reuters.com:*:nL1N2Q80G5
    
    DIAMONDS
    Guinea has proven reserves of 30 to 40 million carats and 
500 million carats of probable reserves, according to a
government website.
    The country exported 270,157 carats of diamonds in 2018 with
a value of $20 million, based on the latest available data,
according to the Kimberley Process Certification Scheme. 
    The Guinean government has said it exported 136,072 carats
of diamonds in 2020.
        
    

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UPDATE 3-Guinea bauxite prices rise on political turmoil, mines
report no immediate impact     urn:newsml:reuters.com:*:nL1N2Q80G5
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 (Reporting by Zandi Shabalala, Polina Devitt, Helen Reid,
writing by Zandi Shabalala. Editing by Jane Merriman)
 ((zandi.shabalala@tr.com))