25/07/2023

GUINEA MINING COMMODITY TRADERS

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Winning seeks fresh bauxite in

Boffa corridor

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The Singaporean mining logistics giant has partnered with
Guinean mining companies Kimbo and GIC to help it meet
growing Chinese demand. Its Chinese rival COSCO, in
partnership with Chalco and SD Mining, is also present in the
region.

Singapore's Winning International Group, which already has a strong

presence in north-west Guinea as lead shareholder in Societe Miniere de
Boke (SMB), is looking to expand southwards around the Rio Pongo in the
Boffa region. Already a major transporter of minerals by sea and inland
waterway to China, it wants to increase its exports from Guinea in partnership
with China Hongqiao Group, also a shareholder in SMB and the main buyer
of its bauxite. 

To do so, its management team in Conakry led by Sun Xiushun has forged
links with the local mining firms Kimbo Mining, headed by former
international footballer Seydouba Bangoura, and Guinea International
Corp (GIC), run by ex-mines minister Ahmed Kanté, who is in dispute with his
former business associates (AI, 07/07/23).

These two companies have obtained the rights to deposits which are
particularly attractive because of their high bauxite content and their
proximity to the Atlantic. Both companies have subcontracted all or part of
their mining operations out to Chinese companies -   Top Mining in Kimbo's
case and Sinohydro in that of GIC. Top Mining is used to working with
Winning, having worked for SMB on the Alliance for Responsible Mining
permit. 

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GUINEA : Winning seeks fresh bauxite in Boffa corridor

Prefinancing in return for access to bauxite 

According to our information, Winning prefinanced part of the inland

waterway and shipping installations required in Kimbo for the transhipment

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of bauxite onto its ships. Talks are understood to be underway on a similar
agreement between the Singaporean group and GIC. 

Winning is in a position of strength in relation to these medium-sized mining

companies. Kimbo and GIC clearly do not have the capacity to sell their ore
themselves on the international market. Winning can pay them cash to buy
their bauxite at knockdown prices and thus optimise use of its ships. They are
already transporting SMB's bauxite to the port of Yantai, which is the main
point of entry in China for minerals destined for the metallurgical industry. 

The 38 million tonnes of bauxite which SMB expects to supply in 2023 are no
longer sufficient to meet Hongqiao's needs. The group, which is China's biggest
aluminium producer, needs to meet exponential growth in demand from the
Chinese aircraft and automotive industries. It is understood to be ready to buy
tens of millions of tonnes of Guinean bauxite in addition to what it already
receives from SMB. 

The efforts being made by GIC and Kimbo to increase production are being
hampered, however, by disagreements between their shareholders and
mining partners, and are likely to take time to bear fruit. Production was
suspended at Kimbo at the end of June. 

COSCO the competitor

The Singaporean group's only real competitor in the region is China's COSCO
shipping group, which is working with it compatriot Chalco, which is mining
two bauxite deposits north of Boffa. COSCO has also forged links with Sun-Da
Mining (SD Mining), a Chinese private sector operator which is mining
deposits adjacent to those of GIC. SD Mining and GIC together set up the
Alliance Guineenne de Bauxite, d'Alumine et d'Aluminium (AGB2A),
which, following disagreements between partners, was split into two.

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GUINEA : Winning seeks fresh bauxite in Boffa corridor

The Guinean authorities are little involved in mining matters in the region.
The entourages of President Mamadi Doumbouya and mines minister
Moussa Magassouba have not intervened to facilitate the shared use of
mining infrastructure there, control the price paid for bauxite by the Chinese
groups or settle the disputes between the partners in the various mining
projects. Only SOGUIPAMI, which is the state's shareholder in most mining

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projects, seems to be following the companies' logistics and commercial
activities.

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