The world's second largest bauxite producer takes strong action, revoking 51 mining rights in one go

According to media reports, the Guinean government has announced the revocation of 51 mining licenses. Some analysts believe this move serves as a warning from the world's second-largest bauxite producer to major operators.

It was reported that late Thursday night (May 15) local time, Fana Soumah, Guinea's Minister of Information and Communication, announced in a televised address that President Mamadi Doumbouya had signed a decree revoking the mining concessions.

The revoked mining concessions include bauxite, gold, diamond, graphite, and iron ore. Soumah added that these concessions had been "returned to the state free of charge," citing multiple articles of Guinea's mining law as the basis for revoking the licenses.

Earlier in the day, the most-traded alumina futures contract on the Shanghai Futures Exchange hit the daily price limit, rising by 7% to a high of 3,149 yuan/mt.

It is understood that Guinea holds the world's largest bauxite reserves. Bauxite, the primary ore for aluminum production, is crucial to global industrial metal production.

According to the 2023 data from the US Geological Survey, Guinea's bauxite reserves are approximately 7.4 billion mt, accounting for 24.7% of the world's total reserves. In the same year, Guinea's bauxite production was 97 million mt, representing 24.3% of the global total, second only to Australia (98 million mt, 24.5%).

Source: US Geological Survey

Guinea's bauxite deposits are highly explored, with most mining rights controlled by the Guinean government and foreign companies. The Guinean government stated that the country exported approximately 146.4 million mt of bauxite in 2024.

Tom Price, Head of Commodities at investment bank Panmure Liberum, said, "The Guinean government is increasing pressure on the bauxite industry."

Price added, "We suspect the Guinean government is consolidating the number of foreign bauxite miners and forcing the industry to invest in local downstream processing capacity."

Last week, the Guinean government revoked the bauxite mining rights held by Kebo Energy SA and Emirates Global Aluminium.

According to Kebo Energy's 2019 feasibility study, the company originally planned to mine 10 million mt of bauxite annually in Guinea. Additionally, it intended to invest in and construct an alumina refinery locally, scheduled to commence production in 2024 with an annual alumina production capacity of 2.6 million mt.

A source close to Kebo Energy said the company failed to secure sufficient funding for the alumina refinery. Emirates Global Aluminium's mining license was also revoked due to its failure to fulfill its commitment to build a local alumina refinery.

Media analysis has pointed out that the actions of the Guinean government reflect the increasingly complex business environment in West Africa. Since 2020, Niger, Mali, and Burkina Faso in the region have also strengthened their control over mineral assets in a bid to increase revenues.