The Republic of Guinea will be the recipient of a US$20 billion loan from the People’s Republic of China in exchange for concessions on its significant bauxite ore reserves.
According to reporting yesterday by Reuters, the loan will be disbursed over twenty years. The loan will be guaranteed by in-country projects 125 miles northeast of Conakry at Boffa including China Power Investment Corp’s (CPI) planned alumina refinery, a bauxite mine operated by the Aluminium Corporation of China Limited (Chalco), and a bauxite-mining project operated by China Henan International Cooperation Group.
“Those are the three projects targeted as priorities for the first phase,” explained Guinea’s Mines Minister Abdoulaye Magassouba. “The revenues these projects generate will serve as reimbursement for the loans.”
He went on to say that the money will be used for significant infrastructure upgrades. Improvements expected to be funded by the loan include roads in and to the capitol Conakry, enhancements to Conakry’s port facilities, electrical transmission lines, and the construction of a new university.
The just-announced loan comes on the heels of the announcement of Chalco’s US$500-million investment in a bauxite ore project in the country. That project, which is to be carried out in the Boké Region, is the first in a three-phase plan that will ultimately yield primary aluminium production. According to Reuters, the Chalco project has been in the works for the past five years and is projected to be worth around US$6 billion.
Guinea sits atop the largest reserves of bauxite of any country on Earth, boasting reserves of up to forty billion tons. Rio Tinto and Alcoa both have substantial operations in country, as do China’s Hongqiao and Russia’s Rusal. The Middle Kingdom has been angling for increasing its presence in the Guinean bauxite market for several years, with exports from Guinea to China expected to double in the course of the current year.