Irish exploration firm Anglo-African Minerals has announced a €200 million joint venture with a Chinese consortium to develop an aluminium ore prospect in Guinea.
Anglo-African, which owns four bauxite licences in the country, said it had entered into the first stages of an agreement with the two-company consortium to codevelop its flagship Forward Africa Resources (FAR) project located in the Kindia and Dubreka prefectures.
The company, whose headquarters are in Cashel, Co Tipperary, has also engaged the charity Plan Ireland International – which has worked in Guinea since 1998 – to advise it on a sustainable development programme to benefit the local community.
Agreement
As part of the agreement with China New Era Group and China Geo-Engineering Corporation, a new subsidiary company is to shortly seek a listing on the Hong Stock Exchange.
"This joint venture will secure the future of the Anglo-African Minerals projects and provide significant share dividend inflows," said chief executive James Lumley.
As many as 1,200 jobs are expected to be created as part of the project.
The new company will initially focus on building rail infrastructure to enable output from FAR to be taken to the port of Conakry, and from there by barge to Panama.
The FAR licence, which covers a total area of 338km sq, is located just 15km from an existing rail spur that connects with the port. The company also intends to eventually link its Somalu and Toubal projects by rail as well.
The FAR licence has a potential resource of up to 300 million tonnes of high-grade bauxite, with Anglo-African targeting output of two million tonnes per year.
According to forecasts, global consumption of aluminium is expected to double from 41 metric tonnes in 2010 to 82 metric tonnes in 2025.
Well positioned
With more than 40 per cent of global bauxite reserves, equivalent to about 7. 4 billion tonnes, Guinea is seen as being well positioned to meet the additional demand.
Veteran resource investor John O'Connor, the chairman of Anglo-African, told The Irish Times that the joint venture was a major turning point for the firm.
“It’s a fantastic deal and a great story for a small company based in Cashel which ended up operating out of London, raised money in Azerbaijan to drill holes in Africa, and then bought in a Chinese consortium,” he said.
Mr O’Connor said the company had decided to engage Plan Ireland International to avoid causing unnecessary disruption in the local community.
“We didn’t want to just parachute in 1,200 new jobs and €10 million a year in expenditure into a small rural community as it can bring about a lot of undesirable developments and shatter the existing social infrastructure there,” he said.
“I got in touch with Plan to tell them we were going to be in Guinea and that we’d like to support their work there. However, it very quickly turned into a situation in which we became the net beneficiaries because of course they knew much more about what was going on in the region than we did.
“So it’s not a case of philanthropy but more about them guiding us so that we do a good job and leave a good legacy behind us,” Mr O’Connor added.
