(Ecofin Agency) - Monday, the British firm Alufer and the government of Guinea signed an agreement for the exploitation of the Bel Air bauxite deposit, located in the Boppa prefecture in the North-West.

After obtaining in 2010 his exploration permit and then in 2013 his exploitation permit, the company finally inked the agreement that allows him to produce 5 million tons of bauxite by 2017 as projected. Under the terms of this agreement, main construction works are to begin during the second semester of the year while commercial production will start at the end of 2017.

The project which requires an investment of about $140 million includes operations such as: bauxite extraction with surface equipment, transporting ore from exploitation site to exporting ships and increasing production by 5 to 10 million tons per year, over five years.

Bauxite is key component of aluminum. In Africa, Guinea is the leading producer. Since it is traded over-the-counter and also because global demand for the ore fare well, prices of Bauxite are stable.

Truly, China is the first importer of Bauxite as it uses it to fuel its Aluminum over-capacity production. British consulting company Roskill published a report titled Metallurgic Bauxite and Alumina which forecasts, by 2026, a 5% annual growth of global demand and production. This increase could affect prices of bauxite which is traded at $55 a ton since 2014. If this occurred, Guinea would hence have an additional source of revenues to boost its economy just like Botswana did with diamonds a few years back.

In 2015, Guinea who holds the best bauxite reserves in the world has exported 18.9 million tons of bauxite.

Stéphanie C. TOHON