Guinea renews bauxite contract with Iran

Guinea has renewed a 25-year agreement with the government of Iran to allow it to start producing bauxite, according to official sources and documents seen by Reuters on Sunday.

Iran will hold a 51 percent stake in the project, the Societe des Bauxites de Dabola-Tougue (SBDT), which permits production over 5,684 square kilometres once a fresh feasibility study has been conducted. Guinea holds the minority stake, according to the contract, first signed in 1992.

The documents were signed at the end of July by Guinean Minister of Mines Kerfalla Yansané and Iranian Minister of Industry, Mines and Trade Mohammad Reza Nematzadeh.

The concession includes 13 bauxite plateaus at Dabola and 12 at Tougue, both in central Guinea, which have a combined reserve of 600 million tonnes. A study in 2010 estimated that the project could be worth $505 million over three years.

Guinea says it has the world's largest supplies of bauxite, used to make aluminium, but is ranked fourth in exports. The government says it can boost production by 30 percent before the end of 2016.

SBDT will produce in an area where there is no current mining. The Bauxite Company of Guinea, another joint venture involving Guinea and an international consortium, produced 15.2 million tonnes in 2014. Compagnie des Bauxites de Kindia, also a joint venture, produced around 2.5 million tonnes.