An aerial view of the Sangarédi bauxite mine. © CBG
Guinea is a country well endowed with mineral resources. It has nearly a third of the world’s reserves of bauxite—the primary ore in aluminum. It also has one of the largest untapped high-grade iron ore deposits, as well as other minerals including gold and diamonds. Yet this country of 12 million people is one of the poorest in the world, with a gross domestic product per capita of just $550.
Poor governance and lack of infrastructure have for many years hampered the development of Guinea’s mining sector. More recently, the Ebola epidemic and a decline in commodity prices have also taken a toll on the country.
But IFC’s commitment to expand the Sangarédi bauxite mine—the fifth largest in the world—lays the groundwork for accelerating the development of Guinea’s economic and social potential. Our $200 million investment package for Compagnie des Bauxites de Guinée (CBG) will support the expansion of the Sangarédi mine, its processing plant, and shared multiuser infrastructure.
IFC’s investment is expected to increase the mine’s production capacity from 13.5 million tonnes to 18.5 million tonnes per year by 2018. Aside from creating and sustaining thousands of jobs, the expansion will allow Guinea to significantly boost its bauxite exports in the future, generating much-needed revenues for the government.
Guinea’s mining industry plays an important role in the national economy, contributing about 25 percent of the country’s gross domestic product. CBG is already the government of Guinea’s most important revenue generator and the largest private sector enterprise in the country, with a long and strong track record unaffected by political unrest.
IFC’s involvement in the Sangarédi bauxite mine is multi-faceted. We are working to ensure the project is developed in line with international best-practice environmental and social standards. This includes several initiatives to address the complex environmental impacts of this and other projects in Guinea—specifically on chimpanzees. We are in the process of engaging with the company to provide advice to maximize the flow of benefits from the project to local communities and to the local economy. And, working with the World Bank, we are also supporting Guinea’s efforts to improve economic governance and enhance transparency.
Rehabilitation of CBG’s transport infrastructure, including port and rail, is an important part of the project. The company will increase the capacity on the Kamsar-Sangaredi rail corridor to about 42 million tonnes by the mid-2020s, from 15 million tonnes currently. New train cars will be added and new siding loops will make it possible for trains travelling in opposite directions to pass one another. An improved railroad is expected to attract more investment to mining projects in the area and provide people living along the rail corridor with a safer and more dependable transport option.
The way Guinea manages its mining resources will determine the future prosperity of the country. That’s one of the reasons IFC’s work in Guinea is part of a collaborative effort with other development partners, including the European Union, African Development Bank, Natural Resource Governance Institute, and United Nations Development Program.
With improved governance, better infrastructure, and sustained higher levels of investment, Guinea could improve the lives of the 55 percent of its population who fall below the poverty line and build a more prosperous life for all its citizens while protecting the country’s unique biodiversity.
To learn more about IFC’s work in mining, visit: www.ifc.org/ogmc
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Published in September 2016
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