Guinea looks set to boost its bauxite exports after a new mine was given approval by the West African nation’s lawmakers.
The $3.5bn Kimbo bauxite project is expected to produce some 3mt of bauxite annually and 1.5mt of alumina per year.
The bulk of the $3.5bn earmarked investments will reportedly go into the construction of a refinery, roads and railways.
This is the latest development in Guinea’s burgeoning bauxite export industry and follows a series of infrastructure and legal measures announced in November that were designed to help improve the flow of exports.
Bauxite producer Societe Miniere de Boke (SMB) is set to spend $1.2bn to build a railway linking its mining operations with the port of Dapilon.
SMB, which is a joint venture between Winning Shipping, Guinea, Shandong Weiqiao Aluminium & Power Co and UMS International, says work on the 135 km line will start within 18 months.
Separately, Guinea’s government has also approved the setting up of a national agency to regulate the transportation of bauxite.
The agency will reportedly manage a fleet of 1,000 vessels over the next three years, according to a recent government statement.
Guinea is home to more than a quarter of the worlds bauxite reserves and is the largest exporter of the commodity to China.
A recent report by Clarksons suggested Guinea bauxite exports rose by 40% year-on-year in the January-September period and was on track to reach 55mt in full year 2018, accounting for 48% of global exports.
The report also said that the trade has seen a significant upsizing in vessels used to transport the aluminum-making commodity.
In 2012-14, Guinea’s bauxite exports were fairly stable at around 18mtpa, with shipments transported by handy and panamax vessels including the kamsarmax design of 82,000-dwt.
Kamsarmax got its name by meeting the 229-meter limit on ship length at the Port of Kamsar, a major bauxite shipping port in Guinea.
However, Clarksons said significant investment in Guinean bauxite mining projects and export infrastructure by Chinese companies saw China begin to import bauxite from Guinea in significant volumes in 2015-16.
By 2017, capesize vessels accounted for more than half of the total tonnage calling at Guinea bauxite export ports, even despite these larger vessels requiring transhipment via barge to load.
The next ‘upsizing’ step is already clearly in progress, with Clarksons data suggesting that newcastlemax bulkers now account for around 25% of Guinea’s bauxite exports so far this year, up from 2% in 2016.
The shipbroker says this trend looks set to continue, with China COSCO Shipping reportedly looking to order at least six Newcastlemaxes to meet a 5mtpa contract with Chinese aluminium producer Chalco, as well as a number of barge to ship transloaders.
Despite representing just 2% of total volumes, the bauxite trade is expected to account for around one fifth of dry bulk trade growth in terms of tonne-miles this year.
“With continued investments expected to drive further growth in the coming years, Guinea’s bauxite exports look likely to remain a bright spot in the bulk carrier sector in the future,” Clarksons said.
