CONAKRY (Reuters) - China agreed on Wednesday to loan Guinea $20 billion over almost 20 years in exchange for concessions on bauxite, an ore of aluminum which the West African country has in abundance, the mines minister said.
The projects guaranteed by the loan included China Power Investment Corp’s (CPI) planned alumina refinery and Aluminium Corp of China’s (601600.SS) (Chalco) bauxite mine and another bauxite project by China Henan International Cooperation Group, all of them in the northwestern town of Boffa.
“Those are the three projects targeted as priorities for the first phase,” Mines Minister Abdoulaye Magassouba told Reuters. “The revenues these projects generate will serve as reimbursement for the loans.”
The minister said the money would be spent on badly needed infrastructure - Guinea is one of the world’s least developed countries - a roads-for-minerals formula that China often uses to gain access to Africa’s resources.
Projects earmarked included roads in the capital Guinea and highways upcountry, a project for extending the port of Conakry, an electric transmission line and the building of a university, Magassouba said.
Chalco said last month it plans to invest $500 million in the project in Boffa, about 200 kilometres from the capital Conakry, which was abandoned by BHP Billiton (BHP.AX) in 2013. The $6 billion CPI alumina project has been on the cards since at least 2012.
Guinea, Africa’s leading bauxite producer, holds some of the world’s richest bauxite and iron ore deposits, including the Simandou iron ore deposit, in its remote east, which is mired in legal disputes but has nevertheless attracted intense interest from China.
Reporting by Saliou Samb; Writing by Tim Cocks; Editing by Susan Fenton