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CLASS

Race to bauxite, the red gold of Guinea competing with China and Australia

February 19, 2019


Abstract : In 2018 the yearly output of bauxite, which is the main source to produce aluminum, reached 65 million tons. The Stm consortium between Winning Shipping and Shangdong Weiqia, has invested 1.5 billion dollars and signed a 3 billion agreement.

In 2018 the yearly output of bauxite, which is the main source to produce aluminum, reached 65 million tons. The Stm consortium between Winning Shipping and Shangdong Weiqia, has invested 1.5 billion dollars and signed a 3 billion agreement.

08/02/2019, Class Editori – China strongly relies on the Guinea bauxite, which is the main source for aluminum production. Guinea has become the third largest producer in the world of the "red gold". It is loaded onto carriers from Guinea and headed to China, by far the largest producer and the largest aluminum consumer in the world. The first mining company in the country, Smb, is led by a Frenchman but framed and co-funded by Chinese. The operations center was inaugurated in the small port of Kamsar in the presence of President Alpha Condé, at the end of November. In the control room, a dozen Asian operators trace the flows of river and sea traffic. Around fifteen ships dock in the immense Chinese port of Yantai every month, with its 25 kilometers of quay.

In the port of Nunez, in Guinea, colors stand out on fishing boats, barges and large boats off the coast, said manager Li Wenjun to Le Figaro. Barges go up the river continuously in the direction of Dapilon and Katougouma mining ports. Other vessels are towing tugs weighed down by thousands of tons of bauxite to cranes installed in the open sea, then are loaded onto carriers to be transported to China, in the port of Yantai. The control tower allows to follow all the loading operations of goods in real time and to adjust the traffic to avoid accidents. It represents a key issue as Guinea does not have a maritime authority. Moreover, fishermen are not used to respect the perimeter along the banks and cross over into the harbor navigation spaces.

In the last couple of years traffic has undergone a huge increase due to the growth of the mining consortium Smb, a mining company based in Boke. The partners of the company are the Singaporean shipowner Winning Shipping, main transporter of bauxite in China, the Chinese aluminum producer Shandong Weiqia - having a yearly 45 billion dollars turnover - and the transport and logistics company Guinean-Lebanese UMS. According to Le Figaro, in 2018 Smb substantially exceeded the national company Cbg and Russian Rusal, which are the two main operators in Guinea. "No one had thought of river transport before. We built two ports", General Manager of Smb Frédéric Bouzigues explained to Le Figaro. Born in Nice, Bouzigues has been in Guinea for 20 years, and underlines the unprecedented association of Smb among logistics operators not owning a mine. However, in three years they have become one of the bauxite leaders in the world. The small country of Guinea has gone from a stable annual production of 15 million tons to approximately 65 million in 2018, reaching the two top players China and Australia. As reported by Le Figaro, the sector has driven the country's growth (+ 10.5% in 2016 and + 18.3% in 2017), after the severe Ebola outbreak.

The consortium benefited from a review of exploitation permits following the arrival of Alpha Condé in 2010, a moratorium in Malaysia in 2015 to limit the impact on the environment and an embargo in Indonesia on exports. Finally, a partnership with Alliance minière responsable (Amr), a French startup which obtained the exploitation permit in 2014, favored Guinea's bauxite.

Smb has invested 1.5 billion dollars in the Boké region to build roads, bridges, ports and bases, with effects on employment. Furthermore, the company has signed agreements with the state for another 3 billion.

(Source:Class Editori)

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Keyword: class China-foreign-trade resources

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