Guinea squeezes Emirati-owned bauxite miner

Guinea, the world’s top exporter of bauxite, has revoked the mining title of Emirates Global Aluminium’s GAC subsidiary and awarded it instead to a new local entity – a move that the Emirati producer slammed as an “illegal takeover” and a “de facto expropriation.”

President Mamadi Doumbouya went on state television Monday to read a newly drafted decree announcing the creation of government-owned Nimba Mining, media including Geneva-based Agence Ecofin reported. Another decree grants Nimba exploitation rights on the 690-sq.-km bauxite concession for 25 years, Ecofin said.

Monday’s announcement escalates a long-simmering feud between Guinea and the company. After banning GAC in October from exporting its bauxite, which led to a suspension of mining activities, the government last month terminated the basic agreement that allowed the unit to operate in the country. Guinea has accused GAC of failing to fulfill its commitments, especially regarding the construction of an aluminum refinery.

Guinea shipped more than 130 million tonnes of bauxite in 2024, according to data compiled by the United States Geological Service. It also holds the biggest reserves, estimated at 7.4 billion tonnes.

‘Flagrant violation’

“The measures initiated by the Republic of Guinea amount to a de facto expropriation of EGA’s investment in Guinea,” Emirates Global Aluminium said Tuesday in a statement. “This measure also constitutes a flagrant violation of GAC’s contractual and legal rights. It puts over 3,000 local jobs at risk and raises serious concerns about the Republic of Guinea’s adherence to the rule of law.”

The “illegal and hostile takeover” breaches Guinea’s contractual obligations and undermines any credibility of its engagement with foreign investors, Emirates Global Aluminium added.

“By re-assigning GAC’s mining rights to another entity – which, notwithstanding the lack of transparency, seems to be a Guinean State entity –, the State of Guinea has signalled that it is willing to violate fundamental legal principles to the detriment of investor confidence, governance transparency, and long-term national interest,” the company said.

Emirates Global Aluminium said it’s reserving “all of its rights.” GAC, meanwhile, “will seek the redress it is entitled to through the legal means it has already initiated and any other legal action before the competent fora.”

Regional unrest

Monday’s decrees come a few weeks after the creation of Guitram, a new state-owned maritime transport company that Minister of Mines Bouna Sylla said would transport about half of the country’s bauxite exports using ships flying the Guinean flag.

Guinea, run by military government since 2021, is one of a string of junta-ruled countries stretching from the Atlantic to the Red Sea intent on earning more from resources. Burkina Faso, Mali and Niger have all made headlines over the past few years by hiking taxes, royalties and government stakes in new mining codes. Barrick (TSX: ABX; NYSE: B) has had to shut a mine in Mali that accounted for 15% of its global gold output.

Emirates Global Aluminium invested about US$1.4 billion to set up GAC. Bauxite exports began in 2019.

GAC has been a driver of long-term socio-economic development in Guinea’s Boké region, according to Emirates Global Aluminium. It estimates the unit contributed US$244 million to the Guinean economy last year and invested US$700,000 in social projects.

Emirates Global Aluminium is owned by Abu Dhabi’s Mubadala Investment Company and Dubai’s Investment Corporation. It’s the largest company jointly owned by the two Emirates.

While the fate of the company’s Guinean venture is up in the air, Ghana is apparently open to doing a billion-dollar deal.

Ghana, which recently cancelled a US$1.2 billion bauxite lease with local producer Rocksure International, is keen to enlist an overseas company to develop the Nyinahin Hills mine the in the central part of the country, Reuters reported last month. Emirates Global Aluminium is among the potential partners that could mine the deposit, which holds about 376 million tonnes of bauxite, Reuters said.