How Rusal helps Guinea use bauxite mining to push forward with development
The West African country of Guinea is blessed with rich natural resources, especially bauxite – the primary ore of aluminium. Bauxite mining in Guinea is big business, and through collaboration with companies like Russia’s Rusal, Guinea is finally beginning to unlock the potential that lies beneath.
Unsurprisingly, it is widely accepted that mining these huge reserves of bauxite will provide Guinea with the economic strength it needs to move into the next phase of its development.
Guinea’s bauxite reserves are certainly its greatest natural asset, albeit one that has not yet been exploited to anything near its full potential.
Despite its huge bauxite mining potential, Guinea remains one of the world’s poorest nations. It ranks 179th out of 187 on the United Nations Development Programme (UNDP) Development Index in 2014. According to the World Bank, Guinea’s gross national income (GNI) per capita is around 36% lower than other nations in Sub-Saharan Africa.
However, bauxite mining in Guinea has the potential to change all that. Guinea is working with several international companies – including Rusal – to ensure that it is making the most of its bauxite mining possibilities.
The history of Bauxite mining in Guinea
Beneath Guinea lies the enormous Archaean West African craton, which has over time resulted in the formation of huge bauxite deposits – most of which remain untouched by mining operations. Indeed, Guinea has the largest potential for bauxite mining to be found anywhere in the world. A 2008 report from the International Monetary Fund notes that Guinea is endowed with one of the world’s largest deposits of bauxite, with one third of the world’s known bauxite reserves lying beneath Guinea’s perimeters.
However, the report also details the obstacles facing Guinea in achieving its full potential bauxite mining. Mining of bauxite in Guinea was low considering its proven and significant reserves, and the contribution of the bauxite mining to Guinea’s GDP declined from 13% in the early 1990s to 10% in the period up to 2008.
However, bauxite mining in Guinea has enjoyed something of a resurgence and now contributes much more significantly to the country’s GDP. In 2016, for example, the country exported 19 million tonnes of bauxite, worth around USD$815m. And using statistics from the last two years, it has been calculated that the bauxite mining industry in Guinea will export 17.2 million tonnes of bauxite worth USD$777m in 2017.
Guinea wants to take its bauxite mining capabilities even further, and is setting big targets for its bauxite mining industry in the future. In February of 2017, Guinea’s mining minister Abdoulaye Magassouba said that Guinea aims to treble its bauxite mining output by 2020, saying: "the minimal objective for the government is to bring bauxite production from 18 million tonnes in 2015 to 60 million tonnes within three years".
This is a challenging bauxite mining goal that Guinea has set itself, but with the support of outside investors such as Rusal, it is one that Guinea has every chance of achieving.
Rusal’s bauxite mining in Guinea
Rusal has been conducting bauxite mining in Guinea for many years, and is the country’s largest employer.
In Kindia, Rusal has managed the Compagnie des Bauxites de Kindia since 2001. The Kindia site is actually Rusal’s largest raw materials asset globally and accounts for around 30% of the company’s total bauxite output. There, around 3.2 million tonnes of bauxite are mined annually from what is actually one of the largest bauxite deposits on earth, creating employment for approximately 800 people.
In 2014, Rusal further built on its mining capacity in Guinea with the launch of its Dian-Dian operation, a bauxite mine with reserves of 564 million tonnes. In 2016, Rusal and Guinea signed an annex to the agreement that split the development of the Dian-Dian FDI project into three stages, with the first stage – the construction of a mine with the annual bauxite capacity of three million tonnes – due to complete by the end the end of 2017.
Ambitious targets for bauxite mining in Guinea
Together, Rusal and Guinea have set ambitious targets for these bauxite mining operations. Rusal has agreed to increase bauxite output to between 555,000 and 600,000 metric tonnes of bauxite per annum and, in time, conduct due diligence on the possibility of mining 1,050 million metric tonnes of bauxite per annum.
Working with Rusal to maximise its natural bauxite mining capabilities has not only helped boost Guinea’s GDP, but also many other areas of national life. Rusal takes its corporate social responsibilities very seriously. As such, Rusal has worked with Guinea to develop key areas of infrastructure, such as healthcare and education, wherever Bauxite mining operations are taking place. In Fria, Rusal uses the capacities of its bauxite and alumina complex to ensure the supply of safe drinking water and electricity for local residents, for example. In the wake of Guinea’s devastating Ebola epidemic, Rusal contributed the Centre for Epidemic and Microbiological Research and Treatment (CEMRT) in Conakry to expand Guinea’s healthcare capabilities within the context of a public-private partnership.
The success of Rusal and Guinea’s bauxite mining operation proves that significant private sector investment can help developing nations such as Guinea unlock their potential. Guinea is sitting on bauxite deposits that, for their potential to transform the nation’s future, may as well be a goldmine. And Rusal is helping Guinea to tap into those bauxite deposits and ensuring that the Guinean people can enjoy a better tomorrow.