Rusal and Guinea Agree to Terms on Bauxite Mine, Alumina Complex
29 April 2016 by Staff
Russia’s UC Rusal and the government of West Africa’s Republic of Guinea have come to an agreement regarding the resumption of operations at the Friguia bauxite and alumina complex. The two parties also signed an annex to the Dian-Dian concession agreement regarding development of a bauxite mine of the same name.
The firm and the government agreed to restart operations at the Friguia bauxite and alumina complex next January. Further, twelve months after production begins, Rusal has agreed to increase bauxite output to between 550,000 and 600,000 metric tons per annum. Further down the road, Rusal will conduct due diligence on the possibility of the mine increasing production to 1.050 million metric tons per annum. Both parties will come to an agreement on product realization in the year 2020.
As to the freshly-inked annex to the Dian-Dian concession agreement, it divides development of the mine into three stages – construction of a three-million-metric-ton-per-annum mine by the end of next year, doubling the mine’s capacity to six million tons per annum by late 2021, then increasing it again to nine million tons per annum (with a possibility of expanding it even further to twelve million tons per annum) by the end of 2020. Upon completion of the third stage, Rusal and the government will discuss building an alumina refinery on-site with a nameplate capacity of 1.2 million metric tons per annum. This annex modifies the mine’s timeline, changing the deadline for implementation of the first stage from late this year.
“Taking into consideration the current situation in the global aluminium market, RUSAL’s management and the Government of the Republic of Guinea have agreed that today there is no economic rationale behind the launch of new refining facilities,” said Rusal’s CEO Vladislav Soloviev. “It has been agreed that the focus will be on resuming operations at the existing Friguia facilities and on the stage-by-stage development of the Dian-Dian mine in line with the agreed schedule.”
According to the firm, Dian-Dian is the world’s largest bauxite minefield, having confirmed reserves of 564 million metric tons. Thanks to previous agreements currently in place, Rusal owns the exclusive right to develop the area. The project was declared to have “strategic importance” by Guinean President Alpha Condé in 2013.
Alumina Company of Guinea’s Friguia bauxite and alumina complex has a capacity of 650,000 metric tons of alumina and 2.1 million metric tons of bauxite. The plant suspended production in April 2012.