Aluminum Corporation of China (Chalco) has announced that it is investing US$500M in a bauxite project in Boffa, in the Boké Region, 125 miles northeast of Guinea’s capital Conakry.
The reserves were previously controlled by BHP Billiton. The company intends to start production next year, but no details on how the ore will be transported to the coast have been revealed.
In September, the government of China concluded an agreement to lend Guinea US$20B over the next two decades, in return for access to bauxite by Chalco, China Henan International Cooperation Group and China Power Investment Corporation.
The company will start by shipping ore to China, but intends to begin alumina refining in phase two, then build an aluminium smelter in phase three.
Chalco has been in a stronger financial position since it announced a US$112M profit for the first half of this year, an elevenfold increase on the same period last year. Higher prices and strengthening demand within China have persuaded the company to expand its overseas production. Guinea has the world’s biggest bauxite reserves.
Chalco is also assessing its options for the development of the long-delayed Simandou iron ore mine, railway and port next year.
Most readers of Bulk Materials International will be aware that Simandou is the largest undeveloped iron ore reserve in the world, has been subject to various changes of ownership, and is the object of various legal challenges.
Production of 100 Mtpa has been mooted, all of which would be transported via a planned 650 km railway to a new iron ore port to be built at the mouth of the Morebaya River.
Guinea has been unstable for most of the past decade but President Alpha Conde is now keen to kick-start investment in the mining sector.