Guinea’s Compagnie des Bauxites de Guinée (CBG) has announced an agreement in principle on financing for a loan of over US$1 billion to boost production at its bauxite plant in Kamsar.
The West African country sits atop about one-third of the known bauxite reserves on Earth. Capitalizing on that fact has been a struggle in recent years, however, due to political and social instability. As it stands now, Guinea produces about 19 million metric tons per annum.
“We have obtained the agreement in principle of all our financial partners for the loan of $1 billion for the expansion project of the CBG,” General Director Namory Condé told Reuters. He did not name the loan’s backers.
Condé went on to say that the loan is intended to increase production at the plant from its current output of 14.5 million metric tons per annum to 18.5 million metric tons per annum in 2018, a thirty percent increase. Ultimately the goal is to increase output to 28.5 million metric tons per year by 2027, he explained.
Guinea has suddenly become a major player in the global bauxite market in recent years, thanks to bauxite bans in Indonesia and Malaysia. Recent reports indicate that Weiqiao Group is planning to harvest between twelve and fifteen million metric tons of the ore by the end of the current year.
CBG, a joint venture, is the main player in the Guinean bauxite industry, and holds exclusive rights to bauxite reserves and resources in north-western Guinea through 2038. CBG is 49% owned by the Guinean Government and 51% by an international consortium known as Halco Mining Inc., a joint venture controlled by aluminium producer Alcoa, global miner Rio Tinto and Dadco Investments. CBG currently exports about 14 million metric tons of high-grade bauxite per year.