China agrees to a loan of $20 billion to Guinea in exchange of concession on bauxite

According to a Reuter’s report, China has agreed to offer a loan of $20 billion over almost 20 years to Guinea. The loan will be provided in exchange of concessions on bauxite mined in the West African country, the mines minister confirmed.

The loan will support projects like China Power Investment Corp’s (CPI) planned alumina refinery and Aluminium Corp of China’s bauxite mine and another bauxite project by China Henan International Cooperation Group, all of them in the north-western town of Boffa.

“Those are the three projects targeted as priorities for the first phase,” Mines Minister Abdoulaye Magassouba told Reuters. “The revenues these projects generate will serve as reimbursement for the loans.”  

According to the minister the fund will be spent mostly in improving the infrastructure facilities.  Guinea being one of the world’s least developed countries with rich mineral resources is the perfect destination for China to source ores in exchange of infrastructure spending.

The mine minister said that the project will cover development of roads in the capital Guinea and highways upcountry, port of Conakry, an electric transmission line and the building of a university. Last month, Chalco announced its plan to invest $500 million in an alumina project in Boffa, about 200 kilometres from the capital Conakry, which was abandoned by BHP Billiton.