“The bauxite mining and export have not impacted in Guinea due to this coup, however, it is too early to predict future developments”, Dr Ashok Nandi, Convenor of International Bauxite, Alumina and Aluminium Society (IBAAS).

On 5th September 2021, the world’s second-largest producer of bauxite, Guinea’s military seized power and suspended the constitution, destabilizing the West African nation. AlCircle team reached to Dr Ashok Nandi in regards to the political instability in Guinea and received a prompt reply on it.

AlCircle: Did the global aluminium sector had any prior indication of Guinea’s political instability?

Dr Ashok Nandi: As such there was no indication of any likely military coup in Guinea. However, after the third term of the present President during October 2020 by amending the constitution of a maximum of 2 terms had created some kind of unrest in the country. Despite exporting more than 80 million tonnes of bauxite per annum, the majority of the Guinean population remained poor and there was widespread corruption. The bauxite and other export profit have not reached the general population.

AlCircle: How will the Coup impact the Guinea Bauxite mining industry? Kindly also detail if it will scar the bauxite export?

Dr Ashok Nandi: According to the latest information, the bauxite mining and export have not been impacted in Guinea due to this coup, however, it is too early to predict future developments. Australian companies are closely monitoring the situation and reported that barge/ship loading and export of bauxite is continuing. Our past experience shows that a military coup does not directly affect the ongoing economic activities in the country. However, this time it is reported that the activities of Ministers and departments have virtually stopped and passports of top Government officials are confiscated. As bauxite mining and export are mainly carried out by foreign companies and this is the main revenue source for the country, these may continue, however, no new decisions on exploration / mining leases will be taken in near future.

During the 2008 military coup, bauxite exploration, mining and export by CBG, RUSAL and other companies continued as I was in Guinea during that period, working on BHP Billiton’s bauxite-alumina project. Normally all the disturbances take place in the capital city ‘Conakry’ and remote mining areas continue to function as usual.

Several Chinese companies have assured to set up alumina refineries in Guinea, however, due to lack of political will and persuasion, the projects may remain in papers only. Further, with this kind of political instability, the pit head value addition may remain a dream for Guinea and companies will continue to export high-grade raw material from the country. In this case, Indonesia could impose some restrictions on raw materials export and pressurise Chinese companies to set up alumina plants.

AlCircle: The price of aluminium has surged at 10 years high. Will now Guinea’s power seized by the military propel the price of the metal much higher? What is your prediction on the rise in the price of bauxite?

Dr Ashok Nandi: Well the prices of aluminium were high well before this coup and I don’t think the present disturbances in Guinea may directly impact metal prices in LME. There is enough stock of bauxite in the Chinese ports and Australia is always eager to export their medium to low-grade ores. Bauxite C&F prices in China are fairly low and hovering around US$42 to 44 per tonne. In case of some disturbances in Guinea, Australia, Indonesia, Brazil, Sierra Leone, Ivory Coast, India and Vietnam may partly fill the gap, however, the prices of bauxite may go up to US$ 50 to 60 per tonnes as it was in 2017-18 period.

AlCircle: How will Hindalco and to some extent Vedanta benefit from this crisis?

Dr Ashok Nandi: VEDANTA and HINDALCO are partly dependent on the bauxite import from Guinea but the quantity is quite meagre compared to requirements in China. It is a good time for Government to auction Karlapat and other bauxite deposits in the country as prices of this raw material may increase in the world market. As bauxite prices are likely to go up in the medium term due to this coup in Guinea, it may impact the alumina prices in China.