Guinea has the world’s largest proven bauxite resources, and its iron ore reserves are also very large; in addition, there are abundant local resources such as diamonds, gold, copper, uranium and cobalt.
For global investors, Guinea’s rich resources carry greater investment risks, with political instability bearing the brunt. Since independence in 1958, Guinea has been the scene of several coups; coupled with Guinea’s poor local infrastructure and backward industrial base, foreign investors are also exposed to greater social and legal risks.
As one of the world’s leading bauxite producers and exporters, Guinea’s coup triggered the market for the country’s bauxite supply disruption concerns, Shanghai aluminum and LON aluminum futures have climbed again in the year high, refreshing the highest value in a decade.
In recent years, with the rapid development of the domestic alumina industry, China’s bauxite demand has also been rising year by year. China’s bauxite resources are not abundant, and its dependence on overseas bauxite resources remains high, and Guinea is one of the most important source countries of Chinese bauxite.
In 2016, Guinea overtook Australia to promote China’s largest bauxite import source country. According to the data published by the General Administration of Customs, China imported 52.73 million tons of bauxite from Guinea in 2020, accounting for 47.5% of the total import volume.
Guinea is rich in bauxite resources and easy to mine, and despite the local political turmoil in recent years, it still attracts investors from all over the world. The Chinese side has formed “Win Alliance” led by China Hongi, Aluminum Corporation of China, TBEA, etc.; the European and American companies have Russian United Aluminum Company, Rio T into Al-can, Alcoa, UAE Global Aluminum, etc.
The political turmoil did not have a direct impact on mining production. At present, the military government that launched the coup has released the curfew in mining areas and said it will keep mining activities running normally. From the corporate side, the global aluminum companies with local presence have also not reported any production disruptions.
Nevertheless, the local political instability in Guinea will continue to have an impact on the global aluminum industry. For the Standout iron ore mine, which is said to be able to reshape the global iron ore supply pattern, its development prospect becomes more confusing.
Post time: Sep-09-2021