President Alpha Conte (Alpha Conde) has been arrested after a coup in the West African country of Guinea on Sunday, local time, when the military announced that it had seized power, dissolved the government and suspended the constitution.
Guinea, which is rich in bauxite and iron ore resources, is a major supplier of bauxite to China, and the mutiny directly spurred Shanghai aluminum prices to rise to a 10-year high in the morning. At the same time, Chinese companies have invested heavily in the Simandou iron ore project in Guinea, a strategic investment that could be put at risk by the mutiny in Guinea.
A mutiny took place in Guinea
Hours after a fierce shootout broke out near the presidential palace in the Guinean capital Conakry on Sunday morning local time, the military took over power.
Later, the commander of Guinean special forces, Colonel Mamady Dumbuya (Mamady Doumbouya), announced on Guinean state television that he had taken over power and urged the armed forces to support him. He said the military mutiny was to address financial mismanagement and corruption under the leadership of Guinean President Alpha Conte.
"if you look at our roads and the state of our hospitals, you will realize that it is time for us to wake up," Dumbuya said. "We will launch a nationwide consultation to start an inclusive and peaceful transition."
Dumbuya said in a statement that he would impose a curfew from 8 p.m. local time on Sunday. He also said that Conte is safe, has been in contact with his doctor, and has met his medical needs.
At present, UN Secretary General Guterres has condemned the coup. Nana Akuf-Nana Akufo-Addo, president of Ghana and president of the Economic Community of West African States (ECOWAS), has issued a statement urging the Guinean military to release the president and restore constitutional order, or threaten sanctions against Guinea. In addition the African Union calls on its Peace and Security Council to meet urgently on this matter.
The French Foreign Ministry issued a statement on September 5, local time, saying that France, together with the Economic Community of West African States, condemned the seizure of power by force in Guinea that day and demanded the restoration of constitutional order and the immediate and unconditional release of President Conte. The statement said that France will maintain close contact with African and international partners on this matter.
Bauxite supply may be affected
Guinea is rich in bauxite and iron ore resources, and a number of global mining giants have invested heavily in Guinea to mine iron ore and bauxite.
In terms of bauxite, Guinea is a major supplier of bauxite to China, and its bauxite exports to China are almost on a par with Australia. Guinea exported 82.4 million tons of bauxite to the world last year, most of which went to China, according to government data.
Rusal has invested heavily in bauxite development in the country, and according to a company spokesman, the mutiny in Guinea could have an impact on its aluminum production. According to Rusal, Guinea accounted for about 9% of its alumina production in the first half of this year.
Tom Price, head of commodity strategy at Liberum Capital, a British investment bank, said the mutiny in Guinea "may have a speculative impact on aluminum prices, but the impact on alumina prices will be greater because the incident has a more direct impact on it." This incident will lead to new supply security risks. "
London aluminium prices have risen by about 50 per cent over the past year, close to the highest level in a decade, as the global economy recovers from the effects of the epidemic. On Monday morning, shanghai aluminum futures, the main force of shanghai aluminum, rose nearly 3% to a decade high, spurred by news of the mutiny in guinea.
China's strategic investment in Simandou Iron Mine may face risks
In terms of iron ore, Guinea has the world's largest undeveloped iron ore reserves-Simandou project (Simandou), total iron ore reserves in the region totaled more than 10 billion tons, the average grade of iron ore is as high as 65%, and annual production is expected to reach 150 million tons. Chinese enterprises invest a lot in it.
The Simandou project is divided into the northern section (blocks 1 and 2) and the southern section (blocks 3 and 4). Among them, the mining rights in the northern section have changed hands several times. On June 10, 2020, the "win Alliance (SMB-Winning Consortium)" jointly established by Singapore Weili International, Yantai Port Group, Shandong Weiqiao Venture Group and Guinea United Mining supply Group signed an agreement with the Guinean government to acquire the mining rights in two blocs in the northern section of Simandou for US $14 billion.
The southern section is 45.05% owned by Rio Tinto, the world's largest mining company, 39.95% by the Chinese consortium led by Chinalco and China Baowu, and 15% by the Guinean government.
Domestic iron ore futures fell Monday morning, with the main contract down 5.16% to 734 yuan / ton as of press time.
