The West African nation of Guinea sits atop of some of the world’s largest bauxite and iron ore reserves.

Danish national Bernt Meldgaard Christensen, who has just taken the helm of Guinea Shipping Corp (GSC), wants the company to play a major role in the country’s mining exports.

GSC was formed in 2010 by Henrik Christensen. He died in April this year, and his brother Bernt, who has taken over as executive chairman, promises to reinvigorate the company.

“Henrik had a vision to build a shipping line for Guinea that also provides a platform to help develop the country’s own maritime industry,” Christensen said.

Political issues

“I will carry on with that work and strengthen our ties with Guinea’s maritime sector with a view to helping local people build careers as international seafarers.”

Although the company was founded 10 years ago, little activity has taken place until now.

“My brother was very active with several business ventures in Africa, but due to lots of political issues this one was put on hold. There is a lot more stability in Guinea now, and the president is doing a lot to welcome foreign investors, especially in the mining sector. A lot of new concessions are starting this year,” Christensen said.

“The country offers a huge potential for shipping and logistics.”

Limited port facilities

Although his goal is for GSC to cover the full shipping spectrum, including vessel owning, its immediate priority is to provide a range of marine logistics services for several new mining companies that are starting production in 2020 and 2021.

“Our first step is to bring cargoes from the mines to where it is loaded on board,” he said.

Most ships loading Guinea’s bauxite do so at anchorages due to limited port facilities. GSC has already signed contracts that will involve transporting cargoes to waiting bulkers by barge and loading them by floating cranes.

“We have started on a small scale. The wet season ends in August, and after that operations will really get going,” Christensen said.

He is keen to move quickly into the next phase of GSC’s development, which will involve the chartering, acquisition and operation of bulkers.

Almost all of Guinea’s mineral exports are sold on a free-on-board basis, cutting any local in­volvement out of the freight value chain. The government wants to change this, and has set a goal for 50% of exports to be carried on domestically controlled ships.

“The Ministry of Mines does not require this for existing mining companies, but they are encouraging new mines to support the country’s shipping sector,” Christensen said.

GSC aims to get involved at an early stage and be first out of the gate.

It wants a mix of owned and chartered vessels to provide a flexible response to fluctuations in global demand for minerals exported from Guinea.

For now, the company is content to begin with spot charters.

Acquiring ships

Technicians at the bauxite factory of Guinea's largest mining firm, Compagnie des Bauxites de Guinee. Photo: Scanpix

“We will start by chartering ships against individual contracts for specific quantities of cargo,” Christen­sen said.

Eventually, as cargo volumes increase and long-term contracts are received, the company will look at period charters and acquiring its own ships.

Christensen expects financing will come from a mix of private equity interests and private shareholders. “We have had dialogues with companies in Europe and Asia who have indicated strong support.”

Ironically, despite the nationalistic name of the company, the Guinean government will for now be involved with GSC at an ownership level.

Although originally it was plan­ned for the government to hold a stake, these plans have been put on hold. Christensen said the company still works in close association with Guinea’s Private Investment Promotion Agency and the Ministry of Mines.

“The support from local authorities has been very strong,” he added.

The company’s shareholding is Danish, but its headquarters are in the Guinean capital, Conakry.

Training ship

It plans to play a pivotal role in developing Guinea’s maritime sector through training local mariners to sail on its vessels, and has pledged to invest in training schools and a training ship to develop the next generation of Guinean seafarers.

The aim is to have locals form 75% of the company’s workforce within the next three to four years.

Christensen spent a large portion of his 30-year shipping career in technical sales. Hong Kong-based director Paul Bevan, another new hire, came with 25 years of experience working in shipping, transportation, logistics and equipment leasing, including 17 years with Neptune Orient Lines and APL Logistics.

The port of Conakry. Guinea, is a major export hub for bauxite exports and could do so for iron ore. Photo: Scanpix
Guinea's iron ore exports could surpass bauxite

Guinea is poised to become a minerals-producing powerhouse. Decades of post-colonial political strife have been replaced by 10 years of stable democracy, which has finally allowed its mining industry to attract much-needed foreign investment.

Mining is already a vital part of the economy of the country of 12.5 million people, accounting for 90% of its foreign exchange earnings.

Bauxite is its main export, but that could eventually be superseded by iron ore.

Double-digit growth

With bauxite reserves of 7.4bn tonnes, Guinea sits on 26.4% of the world’s known reserves, according to the KPMG Global Mining Institute.

Exports have grown in double-digit figures over the past decade.

Between 2016 and 2019, shipments climbed from 24.7m tonnes to 62.7m tonnes. Of last year’s total, 48m tonnes were exported to China, with the rest heading to Europe, India and the Middle East.

Exports this year are expected to surpass 66m tonnes.

Big projects

Major new bauxite projects, such as a $1.4bn development by Emirates Global Aluminium’s Guinea Alumina Corp (GAC), are expected to boost exports even further.

GAC’s project is the largest greenfield investment in the national bauxite sector in more than 40 years and will add a further 12m tonnes to the annual production tally.

Several other smaller bauxite mining projects are underway or under development.

While Guinea is an established bauxite producer, it is poised to become a major iron ore producer as well.

Excellent quality

Its Simandou region in the southeast contains one of the largest iron ore reserves. Its estimated reserves of 2.4bn tonnes of ore with a grading 65% iron metal would be one of the highest qualities available in the commodities market.

For years, it seemed the super-rich ore under a jungle-covered mountain range might never be dug up.

Legal wranglings were settled by 2019, leaving Simandou divided into four blocks, with blocks 1 and 2 controlled by a consortium backed by Chinese state-owned interests, while Rio Tinto and Aluminum Corp of China own blocks 3 and 4.