[miningmx.com] — GUINEA’S output of the aluminium ore bauxite fell by more than one fifth in the first nine months of 2009, according to a government document obtained by Reuters citing the impact of “institutional instability”.
The paper showed the economic cost of a year of chaos in the world’s top bauxite exporter that began with a December 2008 coup and ended in a failed assassination bid on its leader.
The document revealed similar falls in output of other resources such as alumina and gold, which together with bauxite form the backbone of the West African state’s economy and public finances, already under pressure from a slowdown in global demand.
“Data for the first nine months of 2009, compared to the same period of 2008, show a fall of 22.9% in the total production of bauxite to 10,413,290 tonnes,” said the finance ministry paper.
Output in the third quarter was hit “among other things by institutional instability and a review of mining project contracts”, it said of moves by the junta to re-examine deals signed under late president Lansana Conte.
Income from projects run by mining majors including Alcoa, Rio Tinto and RUSAL accounts for 80% of Guinea’s foreign currency reserves. Such revenues amounted to $149m in 2007.
The Alcoa-Rio venture CBG (Compagnie des Bauxites de Guinee), saw bauxite output of 8,299,780 tonnes in the first nine months, said the report, a figure that compares with the record 13.7 million tonnes it produced for the whole of 2008.
Output of alumina, which is refined from bauxite to make aluminium, fell 25.3% in the first nine months of the year to 361,410 tonnes, while gold production fell 26.4% to 359,610 ounces, it continued.
Diamond output up
However diamond production rose 30.5% to 476,700 carats on the back of strong Chinese demand.
The document did not detail why output of key resources had fallen. Mining firms have repatriated some non-essential staff but have said operations are proceeding as normal.
A September court decision to rescind the sale of an alumina refinery to Russia’s RUSAL reinforced the concerns of some investors about the security of existing contracts, and consultants are warning potential new investors to be cautious.
The data bears out expectations of a sharp fall in Guinean mining income. Citing the global slowdown, a CBG official who asked not to be named said in September revenues would fall some 60% next year as a result of lower demand and prices.
Junta leader Captain Moussa Dadis Camara has made no public appearances since being evacuated to Morocco for treatment of head wounds sustained in a December 3 gun attack by an ex-aide. Junta officials say his health is steadily improving.
Camara has since been named by a United Nations report, on the September 28 killings by security forces of over 150 pro-democracy marchers, as being personally responsible for crimes against humanity and could face international prosecution.
Guinea, whose stability is seen as pivotal to that of the West African region, is currently in the hands of Defence Minister Sekouba Konate, a Dadis loyalist who has so far prevented the country sliding further into chaos.
