Posted: ’22-JAN-07 22:00′ GMT – Mineweb.net – Archive

Alumina prices were ruling at between US$260 and US$275 per tonne Monday, up from US$230 last week amid fears of tighter supplies, as Guinea’s national strike called by unions and opposition political parties to force the country’s leader to step down entered its 13th day.

The production of bauxite, which when refined becomes alumina — the raw material used for making aluminium, is at a standstill after workers at Guinea`s national bauxite company, Compagnie Des Bauxites de Guinee, halted production at the Boké mine and Kamsar and Sangaredi facilities as national protests escalate.

The strike has also halted trains carrying bauxite for export to the port of Kamsar and reduced the number of ships loading at the port.

The West African country is the world’s biggest exporter of bauxite, whose end-product aluminium is the light metal used widely in cars, aircraft, buildings, packaging and consumer goods.

Mineral resources, chiefly bauxite and gold, already represent 85 percent of Guinea’s exports, more than 25 percent of government revenues and 17 percent of gross domestic product.

“The main reason for the tight market is Guinea’s (Compagnie Des Bauxites de Guinee) CBG is on strike again,” Yisha Xue, head of London-based China Metals, was quoted as saying by Reuters. “Guinea supplies about 1 million tonnes of bauxite a month to Western alumina producers … If those supplies are cut, alumina production will fall and the price will go up, at least in the short term.”

CBG is operated by US aluminium giant Alcoa World Alumina through its Halco venture with Canada’s Alcan and privately-owned Dadco. Halco owns 51 percent of CBG with Guinea’s government holding the remaining stake.

The company produces just over 14 million tons of wet bauxite a year from its mine in the northern region of Boke, and exports some 13 million tons a year of dried bauxite. Guinea holds an estimated 25 billion tonnes of bauxite resources, roughly a third of the world’s total.

President Lansana Conte, who seized power in a 1984 coup, is accused of being unfit to rule. In a recent televised statement he said he would slash fuel prices, halt food exports, improve teachers` pay and tackle police corruption, but union leaders dismissed the offer at a stormy meeting in the capital Conakry and voted to step up their action.

“CBG is having a strike and that will have a huge impact on the whole market. It has a large impact on the big companies and that is why I think it will be solved relatively quickly,” an alumina trader was quoted by Reuters as saying. “But I don’t really see it sustained at those levels … Because the moment the market goes close to US$350 then production that has been idled will be ramped up again.”

Reuters quotes industry sources as saying operations at another Guinean mining town, Fria, where Russia’s Rusal runs the Friguia bauxite and alumina complex, had also been reduced to a minimum by the strike action.

The agency said much also depended on the aluminium price, which on the London Metal Exchange was trading at around US$2,700 a tonne on Friday.

“If it stays around the US$2,700 range people will produce whatever they can and the Chinese will start again and put more alumina out there,” it quotes a trader as saying.

However Dick Evans, president and chief executive of Alcan, which employs 3,000 people in Guinea, downplayed the possible impact. He told Reuters: “There could be some minor disruptions in our supply chain, but I don’t see that cascading down to a major interruption in terms of smelters or anything of that nature.”

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