Compagnie des Bauxites de Guinee (CBG) and Mubadala Development Company have signed a long-term supply agreement to supply bauxite, the main raw material in aluminium, the UAE’s state news agency reported on Saturday.
“The agreement with Mubadala will make a significant contribution to Guinea’s economy by enabling the expansion of CBG to more than 20 million metric tons of bauxite per year,” Guinean Mines Minister Mohamed Lamine Fofana was quoted as saying by the Emirates News Agency.
The duration or value of the contract was not mentioned in the report.
The Guinean company has an annual production of 13.5 million tonnes.
The Guinean mines minister said the new agreement would add $500 million to Guinea’s gross domestic product.
Guinea’s government said in a separate press release that Mubadala had said it needs 5 billion tonnes of bauxite by 2017.
According to Guinean sources, Mubadala has been negotiating for a stake in CBG, a joint venture between Guinea, Alcoa and Rio Tinto, since March.
A CBG official in Conakry told Reuters it would take the company at least three or four years to raise production to 20 million tonnes per year. “We can’t do it right away,” he said on condition of anonymity. “We will definitely need to proceed with an expansion project first.”
Guinea is the world’s largest exporter of bauxite.