Guinea to expand bauxite production and export to China on commissioning of SMB railway project

Guinea, known for having the world’s largest bauxite reserves, is set to expand production after the Societe Miniere de Boke’s (SMB) railway project is complete linking Santou II and Houda blocks to the Port of Dapilon.

The railway project has been inaugurated on Wednesday, June 16, whereby Guinea’s Mining Minister Abdoulaye Magassouba said the West African nation granted SMB a concession allowing it to build and operate the 135-kilometer (84-mile) railway for 33 years before returning it to the state.

Most of the new bauxite production in Guinea will go to China, which last year was the biggest buyer of bauxite from Guinea. This comes as good news for Guinea’s finances and that the African Development Bank forecasts Guinea’s current account deficit and budget gap to shrink in 2022. 

According to Government data, Guinea shipped 82.4 million tonnes of bauxite globally in 2020. 

“With the commissioning of the Santou-Dapilon railway, the consortium will establish a bauxite chain with more stable production capacity, more ecological operation and more sustainable development,” said Sun Xiushun, who heads the SMB-Winning Consortium, which owns SMB.

The $1 billion railway investment, part of the consortium’s $3 billion bauxite investment in the country, includes the purchase of 24 locomotives and 1,440 wagons, said Magassouba.

SMB last year accounted for 40 per cent of Guinea’s bauxite exports. It is a joint venture between Singapore’s Winning Shipping Ltd., logistics group UMS International, China’s Shandong Weiqiao, and the Yantai Port group, with 10 per cent stake of Guinean government.