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ROI-Guinea bets bauxite dominance can reshape aluminium supply: Andy Home

ROI-Guinea bets bauxite dominance can reshape aluminium supply: Andy Home
ROI-Guinea bets bauxite dominance can reshape aluminium supply: Andy Home

Guinea, a country in West Africa, is now the world's largest producer of bauxite - the raw material that ultimately becomes aluminium.

It is now trying to use its newfound dominance in order to exert greater control over price and industry structure. Just as Indonesia did in nickel, and the Democratic Republic of Congo in cobalt.

Three resource giants struggle to control mining sectors which have?grown too large too fast, flooding global markets and crashing the prices.

Indonesia uses mining quotas. The Congo has export quotas. Guinea is considering a combination of the two to stop operators from exporting more than what their mining quotas permit them to produce.

Conakry has the opportunity to follow Indonesia's example by shifting from bauxite to alumina refinement and capturing more value of its resources.

The commitment of Chinese state-owned aluminium producer Chalco to build a $1 billion refinery is proof that the strategy is working.

BAUXITE BOOM

Bauxite, the third-most abundant element on Earth's surface, is too dispersed and/or too low in quality to be converted into alumina.

Guinea is home to the largest reserves of metallurgical Bauxite in the world. It also produces a highly-pure?product valued for its low natural silica content.

China has become the largest producer of bauxite in the world, surpassing Australia by 2023. It now represents around 40% of the global production and 70% of seaborne exports.

Guinea's exports increased by 25% in 2025 to 183 millions metric tons, which led to the prices falling by nearly half during the last year and first part of 2026.

The government is looking for the best way to slow down the market without creating the kind of disruption that Congo's export quotas caused.

CHINESE DEPENDENCY

China is increasingly dependent on Guinea to supply bauxite for its massive aluminium sector.

Imports from Guinea grew rapidly, rising from 334,000 tons of bauxite in 2015 to 149,000,000 tons by 2025. By then they represented 74% of total bauxite exports.

China's bauxite deposits are depleted after decades of mining, and they're a lower quality than those found in Guinea.

The country's alumina refinery capacity has also been boosted in the past century. This is far more than its domestic bauxite mine capacity.

The Chinese have plenty of time to prepare for the planned crackdown by Guinea on its bauxite industry. Imports from Guinea in March reached a record monthly volume of 18 million tonnes.

The scale of the flow of materials makes it difficult to break the dependence. The nature of the dependency will however change.

ALUMINA AMBITIONS

Chalco's commitment to building the new 1.2-million-ton-per-year alumina refinery shows how seriously China takes the threat to the flow of raw materials.

This is the first significant overseas investment by China's giant state corporation in alumina. This is the third alumina refinery announced by China in recent months.

The only refinery in Guinea is the Friguia plant. It was built in 1960 and has been owned by France's Pechiney and then by U.S. producers Reynolds, and since 2008, by Rusal. The refinery was shut down between 2012 and 2018, but it is now operating, although at a lower capacity than its original 650,000 tons per year.

Conakry's government aims to build five or six additional processing plants by 2030, with a combined?capacity of 7 million tons alumina.

The seizure last year of mining assets by Emirates Global Aluminium for failing to fulfill a commitment for refining, has served as a warning to other operators.

NEW INDUSTRY HUB

Guinea follows Indonesia's lead, which in 2023 banned the export of bauxite to force miners into building up processing capacity.

Guinea does not have enough energy to refine alumina or smelt it into aluminium.

If Guinea is able to implement its strategy successfully, it could be a catalyst for the development of a West African hub for alumina.

Other African bauxite-producing countries are also following the same path of value-added to keep more of their mineral revenue.

Nigeria signed a $1.3billion investment deal with Africa Finance Corporation to build an alumina refining plant, while Ghana wants to do the exact same thing under the auspices?of the Ghana Integrated Aluminium Development Corporation.

The shift in Africa from mining to "first-stage processing" could have a transformative effect on the aluminum supply chain.

The seaborne bauxite industry will shrink. The global alumina market will grow and China's domestic refineries of alumina will be in competition with the largest raw material suppliers.

Andy Home is a columnist at. This column is great! Check out Open Interest, your new essential source for global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.

(source: Reuters)