Lawmakers in Guinea, the world’s biggest bauxite exporter, approved a larger budget based on expected growth of 4% this year. Revenue is forecast to rise to 13.7 trillion Guinea francs ($1.77 billion), Alfa Mohamed Diallo, a spokesman for the Economic and Financial Affairs Commission at the National assembly, said in parliament recently. That compares with 12.1 trillion francs in 2015. The mining industry will contribute taxes of 1.8 trillion francs, spending will fall to 14.5 trillion francs compared with 15.2 trillion francs last year, he said.
The approved budget takes into account an increase in the value-added tax rate to 20% from 18%. Tax will also be imposed on suppliers to public enterprises, mining, telephone and oil companies.
Guinea possesses over 25 billion metric tons of bauxite – and perhaps up to one-half of the world’s reserves. In addition, Guinea’s mineral wealth includes more than 4-billion tons of high-grade iron ore, significant diamond and gold deposits, and undetermined quantities of uranium. Joint venture bauxite mining and alumina operations in northwest Guinea historically provide about 80% of Guinea’s foreign exchange.
Bauxite is refined into alumina, which is later smelted into aluminum. The Compagnie des Bauxites de Guinea (CBG), which exports about 14 million tons of high-grade bauxite annually, is the main player in the bauxite industry. CBG is a joint venture, 49% owned by the Guinean Government and 51% by an international consortium known as Halco Mining Inc., itself a joint venture controlled by aluminum producer Alcoa ( AA), global miner Rio Tinto and Dadco Investments. CBG has exclusive rights to bauxite reserves and resources in north-western Guinea through 2038.
The Compagnie des Bauxites de Kindia (CBK), a joint venture between the Government of Guinea and RUSAL, produces some 2.5 million tons annually, nearly all of which is exported to Russia and Eastern Europe. The Alumina Compagnie de Guinée (ACG), which took over the former Friguia Consortium, produced about 2.4 million tons in 2004 as raw material for its alumina refinery. The refinery exports about 750,000 tons of alumina. Both Global Alumina and Alcoa-Alcan have signed conventions with the Government of Guinea to build large alumina refineries with a combined capacity of about 4 million tons per year.
Diamonds and gold also are mined and exported on a large scale. AREDOR, a joint diamond-mining venture between the Guinean Government (50%) and an Australian, British, and Swiss consortium began production in 1984 and mined diamonds that are 90% gem quality. The bulk of diamonds are mined artisanaly.
The largest gold mining operation in Guinea is a joint venture between the government and Ashanti Goldfields of Ghana. Société Minière de Dinguiraye (SMD) also has a large gold mining facility in Lero, near the Malian border. Guinea has large reserves of the steel-making raw material, iron ore. Rio Tinto is the majority owner of the $6 billion Simandou iron ore project, which the firm says is the world’s best unexploited resource.