Guinea keeps growth forecast despite lower mineral output

Guinea will maintain its 4.8 percent growth forecast for 2012, 0.9 percent higher than the previous year, despite a sharp fall in gold, diamond and alumina production, a report by the finance ministry showed on Tuesday.

The mineral-rich West African nation, which relies on mining for about 80 percent of its revenues and 20 percent of growth, is the world's top supplier of the aluminium ore bauxite and holds rich deposits of iron ore, gold and diamonds.

Mining firms have signed billions of dollars' worth of deals targeting Guinea's reserves but ongoing political uncertainty, labour strife, and a government review of mining contracts has cooled recent investment.

"The government has forecast real GDP growth at 4.8 percent in 2012 compared with 3.9 percent in 2011," the report said.

According to the report seen by Reuters, gold production fell 9.5 in the first half of 2012 compared with the same period last year, diamond output was 11.7 percent lower while alumina production was down 17 percent in the same period.

Bauxite production, however, was up 22.4 percent in the first half of the year.

Guinea's lone alumina refinery operated by RUSAL has not return to full production after workers went on strike at the plant in April demanding more wages.

The report said the government will pursue fiscal consolidation measures and rigorous management of public finances after Guinea won a $2.1 billion debt relief from the World Bank and IMF Heavily Indebted Poor Countries (HIPC) initiative, paving the way for investments in development.

While the IMF has projected Guinea's GDP growth at 4.7 percent in 2012, Guinea's finance minister Kerfalla Yansane has said the country was aiming for double-digit growth within two years on the back of its social and infrastructure projects.