President Doumbouya to Mining Companies: Build Aluminum Refineries or Risk Losing Mining Concessions
On Friday, April 8, 2022, in a meeting with the major bauxite companies operating in Guinea, President Doumbouya of Guinea’s Transition Government told major mining company CEOs in attendance that they must fulfill their obligations to build alumina refineries and demanded each company provide a reasonable construction timetable to the government by the end of May 2022. The President, who convened and addressed the senior executives of the bauxite miners in the Presidential Palace, added, “It is clear that expectations are not met on the side of our population, and the government is aware of that. This cannot go on. You have signed establishment agreements with the Guinean government. These agreements contain commitments and obligations on both sides. A commitment or an obligation not kept is a cause for nullifying.” Following the President’s remarks, the Minister of Mining and Geology, Moussa Magassouba, individually detailed the lack of progress by each company.
This is the clearest sign to date of the Guinean Government’s commitment to the establishment of a robust bauxite processing infrastructure which would require a substantial energy and power generation platform that the West Africa LNG Group is building in Guinea through the transformational Guinea LNG Project. West Africa LNG Group is committed to the long-overdue goal of providing abundantly available and affordably priced clean-burning natural gas for the development of the Guinean industrial complex and economy to improve the lives of millions of Guineans.
The President of the Guinean Transition Government, Colonel Mamady Doumbouya, had an exchange on Friday, April 8, 2022, with the heads of the mining companies operating in Guinea. At this meeting, the President gave a formal notice to these companies to respect their commitments to build alumina refineries on Guinean territory as soon as possible. The President asked the mining companies to make available to the government their plans regarding the construction of refineries for bauxite processing before a deadline of May 31, 2022. Below is a rough and abbreviated translation of what the President said on Guinea TV in a live roundtable with the mining company executives.
The President demanded from the mining companies a reasonable and clear timetable regarding their construction program for future refineries, without which Guinea risks being the eternal loser in this story. “Investments should be made not to the detriment of Guinea but for its benefit. This is a win-win cooperation. We have put in place several measures for a business environment that will guarantee a high return on investment,” said the President.
The President stated, “It is clear that expectations have not been met to benefit our population to date, and the government is aware of that. This cannot go on. You have signed establishment agreements with the Guinean government. These agreements contain commitments and obligations on both sides. A commitment or an obligation not kept is a cause to nullify these agreements.” he warned the leaders of the mining companies.
From now on, the President announced, “the transformation of raw materials in the country becomes essential. It is imperative and should be done without delay. Several conventions mention on-site refining. These commitments have remained a dead end until today. To do this, I instruct the government to evaluate the agreements by specialized firms to restore the fairness of relations between your companies and the Republic of Guinea.”
The President reassured the mining company CEOs that, “It is not a matter of calling into question the commitments made by Guinea. But it is a matter of ensuring that none of the parties to the various conventions are fundamentally discouraged from exploiting our natural resources by the distribution of income.”
The President argued that “The Government will fulfill all its responsibilities to facilitate the implementation of refinery plants in the Republic of Guinea. The state will play its full role in creating the conditions for developing a prosperity corridor.”
However, clarified the President, “The transformation of bauxite into alumina should not be limited only to the establishment of refinery plants. All raw materials and products used in processing must be produced on-site. It is only at this value-added price that our natural resources will be a positive lever of development for our population.”
Following the President’s remarks, Moussa Magassouba, Minister of Mines and Geology, presented his assessment of each individual mining company’s lack of progress in fulfilling their refinery build-out obligations to the President:
- CBG started exploiting bauxite in 1973, and ten years later it was to begin its transformation into alumina. No feasibility study has yet been submitted.
- SMB is mining bauxite, but in the 18 months following its commercialization date, it had committed to build a refinery and submit a feasibility study for a refinery with a capacity of 1 million tons and an investment of 1 billion dollars which is still on standby.
- GAC was initially 100% alumina; there was no bauxite project at the beginning. Under the previous regime, this company had preferential treatment. It is the only company authorized to export 2 million tons of bauxite as a sample after the company made amendments to their agreement. For phase 1, they are expected to exploit 3.2 million tons of alumina, extendable to 5.6 million in phase 2. No progress has been made at this point.
- Russal COBAD signed an agreement in Guinea in 2001 in Moscow, and in the deal, the company was to have a refinery of 2.8 million tons that would start in 2018.
- SPIC is a new company and has exploited 4 million tons of bauxite to date. Alumina production should begin in October 2022. No update has been received.
- CHALCO’s phase 1 was purely bauxite. Still, in 2020, the company was to submit a feasibility study for its refinery, but once again, there is no clarity and political will at this moment.
- KIMBO’s construction of a bauxite mine is progressing well and the refinery has not yet started.
- SBG operates on Garafiri bauxite and exploits 1.6 million tons of bauxite with funding of 2 billion dollars. It was to exploit 8 million tons of bauxite per year, but no studies have been received.
- CDM China is located in Telemele which was to transform 1 million tons per year of alumina, but no progress has been made.