Dubai Firm Soliciting Funds to Develop US$8 Bln Bauxite Mine in Guinea

Dubai Firm Soliciting Funds to Develop US$8 Bln Bauxite Mine in Guinea
Dubréka Falls, Guinea. Source: Wikimedia

A resources firm based in Dubai has been in negotiations with certain trading houses to begin development of Guinea’s bauxite reserves. The reserves, once held by Anglo-British firm BHP Billiton, are reportedly valued at US$8 billion.

Gajah Investment Group’s co-founder James Tounkara indicated in an interview that he expected interest from the People’s Republic of China in the project, which he said will likely commence by the end of 2017. To date, there has been no contact from the country.

Wracked by political and social instability, the West African country has been unable to properly develop its bauxite reserves, which account for about one-third of the world’s known supply. The previous owner (BHP) of the Boffa South bauxite blocks, which are located about one hundred miles north of the Guinean capital Conakry, ceased exploration of the blocks when the aluminium market went sour in 2012.

Once BHP’s activity ended, the country backed out of a tender for the acreage that was allegedly intended for a Chinese firm that was in league with President Alpha Conde’s political party.

Tounkara signed an agreement with the Guinean government in 2016 to develop the mine. It is believed to contain around nine billion metric tons of ore, giving it a net present value of US$7.95 billion, assuming a 25-year cash model.

Tounkara said the country “missed the opportunity to enter the golden age” by not entering the market prior to the commodity price collapse. But, now that the country is under democratic rule, the native Guinean believes that the bauxite ore is primed for use, and that investors will follow “once one or two mega projects take off.”

He explained further that he has had “interest from major traders” in offtake contracts, but he demurred when asked to give specifics as to prices and the parties involved.

“We have not yet been contacted or contacted them, but I think it will happen,” Tounkara said of China. “I believe there will be an approach.”