Bauxite
The Republic of Guinea is endowed with the largest bauxite resources in the world, and currently is the 2nd largest producer after Australia. BSGR Guinea has several bauxite permits in Guinea, spread over different locations, which have been subjected to two exploration programmes during 2007 and 2008. Both exploration programmes were carried out by Geoprospects Ltd.
The exploration drilling covered 25 plateaux, all lying to the northeast of the town Labé in the province Moyenne Guinée, bordering the Republic of Mali. View map.
The 25 plateaux are situated in three regions: Nioma area, Kounda area and Medina Gada Woundou area. The first drilling campaign comprised 845 holes for a total of 11,073 metres of drilling; the second campaign comprised 1,910 holes for a total of 23,788 metres.
Although the initial resource potential is some 500 mt, drilling and assay results showed that the majority of the potential mineable tonnage, some 230 mt, is situated within the Nioma area, followed by around 100 mt in the Kounda area and 45 mt in the Medina Gada Woundou area.
With this information, BSGR Guinea engaged HATCH to complete an alumina refinery concept study, which was completed in July 2008. The concept study addressed three scenarios:
- Base case - construction of a refinery and the production of 3 mtpa of alumina;
- Case A - the export of 9 mtpa of bauxite; and
- Case B - the export of 1 mtpa of alumina and 6 mtpa of bauxite.
The Base Case provided the best option under the current low forward looking price for alumina, albeit with a negative NPV and low return, and included:
- An annual run of mine production of 9 mt of bauxite ore;
- An annual production of 3 mt of alumina through a dual train low temperature digestion refinery; and
- A 450 km rail line and new port facility assuming that 73 km of the existing Kamsar Sangaredi rail line can be used;
Cases A and B were less favourable due to the marginal difference between the operating cost for exporting bauxite at $25/t FOB and the long term price forecast of $30/t.
BSGR Guinea has, under the current economic outlook for alumina, shelved its bauxite project and is focusing on its Simandou iron ore projects in southeast Guinea.
