The coup in Guinea the previous week stormed the international aluminium markets and propelled the prices for the metal surging to a 13-year high on the London Stock Exchange. The dethroning of President Alpha Condé can lead to a major fuss for Russian aluminium giant Rusal, the global leader of low-carbon aluminium producer, who owns Friguia alumina refinery, the largest in Guinea. Now, if the refinery is pressurized to cease operations, it would be big financial distress to Rusal, forcing the global aluminium prices to tower at a much higher level.
The world largest exporter of bauxite Guinea countered a political turmoil last week, as Col. Mamady Doumbouya led a team of Special Forces suspended the constitution, seized power, dissolved the parliament and closed the borders. The Col. said: “We will no longer entrust politics to one man. We will entrust it to the people. Power would pass into the hands of a National Committee for Unity and Development.”
Now, when it comes to Russia and for its aluminium giant Rusal, Guinea remains a crucial economic ally, as the country is the second-largest producer of bauxite, keeping China behind. The ore is processed to a refinery to transform into alumina, the last raw material for the production of metal aluminium. Rusal owns three bauxite mines in Guinea that account for 42% of the company’s total bauxite capacity.
Russia adored an extremely good relationship with Guinea during Alpha Conde’s tenure. Both the nations had strong and close diplomatic ties and Alpha Conde could count on Russian support to stay in power. In 2019, Guinean overthrown President had a closed-door meeting with Russian President Vladimir Putin, while on the following year, the West African nation changed its constitution and Condé was elected for another six years.
Rusal used to have problems in Guinea before Alpha Conde came to power. It acquired Friguia alumina refinery for $19 million in 2006 under previous President Lansana Conté and just after two, the country complained, the purchase is done at an unfair price and the furthermore needs to be paid. The authorities dragged Rusal to court in 2009 and demanded a further $238 million and subsequently, the claims reached around $1 billion. In 2010, when Alpha Conde came to power, Rusal managed to reach an agreement with the Guinean authorities.
On 6th September 2021, Rusal released a statement saying: “In connection with the events taking place in the Republic of Guinea, RUSAL’s number one priority is the health and safety of its employees and the continuity of its production processes. In case of further escalation, the Company is considering options for the evacuation of Russian personnel in the Republic. The company is monitoring the situation and is working closely with the Russian Embassy in Guinea.”
Rusal is one of the world’s leading producers of aluminium and alumina, while it sells most of its output abroad. Even if there is a temporary cease at the Friguia alumina refinery, it would lead to an even bigger escalation in aluminium prices.
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