Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
A consortium of the Societe Miniere de Boke (SMB) and Singapore’s Winning Shipping plans to build Guinea’s first alumina refinery in a $3 billion effort to develop the West African country’s bauxite industry, it said on Monday.
Guinea has about a third of the world’s bauxite reserves and expects to produce over 30 million tonnes in 2017. However, it has no facilities to transform those reserves into higher-grade alumina, which can fetch higher prices on world markets.
The project will include a 120 km (75 mile) railway connecting SMB’s bauxite mines in Boke to the refinery in Dapilon, which will process the raw material for export as alumina, mainly to China, SMB managing director Frederic Bouzigues told Reuters.
Construction of the 1 million tonne per year refinery is due to start in 2019 after the completion of environmental impact and feasibility studies. It is expected to be completed in 2022, Bouzigues said.
“The local processing of raw materials is one of the biggest challenges for a more inclusive growth in Africa because it creates more value locally while leading to economic diversification,” said Bouzigues.
The bauxite industry has taken on greater significance for the economy in Guinea, where the development of huge iron ore deposits in its forested interior stalled due to a slump in global commodities prices in 2014.
This year, output has been dented by riots in the mining town of Boke over a perceived failure of the mining industry to raise living standards. At least two people were killed in September as protesters blocked trucks from leaving mine sites.
SMB is owned by Winning Shipping and China’s Shandong Weiqiao, along with UMS International Ltd and the Guinean state. (Reporting by Edward McAllister; Editing by Aaron Ross and Mark Potter)
