Forging links with Guinea

The West African country is rich with metals and raw materials – but will it develop its infrastructure enough to lure investors?

The UAE’s eagerness to find and source raw materials from Africa is no secret. So it’s no surprise that Guinea’s president Alpha Condé was in Abu Dhabi late last year with a delegation to make it clear his country was open for business and eager to discuss investment opportunities with foreign companies and governments.

The West African president brought reinforcements in the form of the former British Prime Minister Tony Blair to add a touch of kudos to his message. Blair, whose non-governmental organisation, the Africa Governance Initiative, works closely with Condé, made a brief appearance at the brainstorming session.


Guinea, whose capital is the sea-bound Conakry, is a largely-forgotten West African country bordered by the Ivory Coast, Mali, Guinea Bissau and Senegal. It has massive reserves of bauxite, diamonds, gold and salt, which have the capacity to make it rich. Guinea ranks number five in the world league table for bauxite, the raw material used in the production of aluminium, and 12th in league tables for rough diamonds.

What it lacks is the investment to unlock its potential wealth of natural resources. According to an International Monetary Fund report, the country is impoverished with 55 per cent of the population earning less than a dollar a day.

Delegates at November’s summit in Abu Dhabi revealed the UAE’s plans to build trade and investment links with the country, which will work to both countries’ advantage. “Guinea has entered a new phase of investment. It is attracting more bilateral and multilateral partners, as well as the private sector. Countries from the Gulf are key participants in the rebuilding of Guinea going forward,” Condé told a crowded room of delegates and investors.

The recent announcement of a deal between Guinea Alumina Corporation (GAC), a joint-venture company owned by the Abu Dhabi government-run Mubadala and the Government of Guinea, hints at a closer relationship between the two nations.

The deal is estimated to be worth $5 billion and will involve developing a bauxite mine and alumina refinery. The agreement underscores a desire in the Gulf to obtain raw materials and secure bauxite for Emirates Global Aluminium (EGA), formed last year from a merger of Dubai Aluminium (Dubal) with Emal. EGA is set to be one of the world’s five largest aluminium producers once a second phase of an Abu Dhabi smelter is completed next year. The merger was completed even as aluminium prices have languished amid global oversupply. Guinea announced the agreement with Mubadala and Dubai Aluminium at the conference. Mohamed Lamine Fofana, Guinea’s mining minister, says: “We are seeing further benefits from our long-term strategic partnership with the UAE.”

The deal between the UAE and Guinea involved many high-powered brokers and negotiators, including Blair, who told the audience: “Guinea’s future depends on a thriving private sector and high quality investment from abroad. When countries are on the move, you see three things coming together. The potential in the country; the desire among its people for change; and a leadership with the strength and vision to make it happen. Under President Condé, Guinea has all three. My message to you as investors is: be there. With your eyes open, realistic about the challenges, but be there. The investors who move first won’t regret it.”

Guinea’s future depends on a thriving private sector and high quality investment from abroad.

Blair also drew attention to the country’s plentiful supplies of water and agricultural land, which is largely untapped. Added to that is the country’s undeveloped mineral resources including graphite, iron ore, limestone, manganese, nickel and uranium. Mining currently accounts for 26 per cent of Guinea’s $6.7 billion GDP (as of 2012) and agriculture accounts for 20 per cent.

GAC will develop a bauxite export mine and a port under the agreement, to be operational by 2017, and an alumina refinery with an initial capacity of two million tonnes per year. The first commercial production from the refinery should be within eight years.

The deal has the potential to produce great change for Guinea. Fofana said the agreement would deliver an estimated $5bn of foreign investment into the country over the next eight years: “The development plan will create, at peak, 14,000 direct and indirect jobs and contribute substantially to Guinea’s GDP.”

Bauxite used in making aluminium and mining has long been seen as having potential to deliver significant wealth to Guinea. However some resources that are considered among the world’s best, such as Guinea’s Simandou iron ore deposit, have gone untapped, despite the presence of exploration firms like the Rio Tinto Group and BSGR in the country. Infrastructural and legal constraints have inhibited progress on the investment.

Investors who prospect opportunities in Guinea are cautious of the country’s undeveloped infrastructure, with road and rail systems still requiring considerable investment. Guinea ranks at 195 in the World Bank’s ‘ease of doing business’ index, up from 197 last year. Companies seeking to set up mining projects in Guinea can take advantage of a recently passed mining code. Fofana says that will bring clarity to projects and give legal certainty to international investors.