AFC makes maiden $205m mining investment in Guinea-Conakry
February 7, 2017
One of the largest foreign investments in Guinea post the Ebola crisis.
An international consortium including Africa Finance Corporation (AFC) is set to invest in Alufer Mining Limited to fund the development of Guinea-Conakry’s high grade bauxite reserves. The US$205 million deal will be one of the largest foreign investments in the country since the 2014 Ebola crisis.
Once complete, the project will increase production levels in line with global demand, which at present outpaces supply. Currently, there is a greater than 6% per annum 5-year growth forecast for aluminium consumption, primarily driven by Chinese demand.
These shifts in supply and demand dynamics create an opportunity to ship high grade bauxite ore from Guinea to markets such as China on economically attractive terms, thereby boosting Guinea’s GDP. At present, Guinea has a trade deficit ratio of c.20:1 with China.
Oliver Andrews, Chief Investment Officer of AFC, commented on the announcement: “Mining exports have historically played a crucial role in Guinea’s economy, accounting for up to a quarter of Guinea’s exports.
“As global demand for aluminium increases, AFC is proud to be the sole private sector African investor in the Bel Air Mine, developing a world class mine that adheres to best practise environmental principles. We are also encouraged to see that Alufer has been working with the local community to develop sustainable projects which assist in the provision of drinking water, as well as development of local infrastructure and job creation”.
AFC is experienced in building and developing African economies that have suffered conflict and crisis. For example, AFC has been instrumental in the re-construction of Cote d’Ivoire following the country’s civil war through investments such as the Henri Konan Bridge and in Liberia AFC financed the post Ebola rebuilding of certain fuel import and storage facilities damaged by the country’s long running civil conflicts. Equally, investment in Guinea’s infrastructure will help to rebuild and diversify the economy following the Ebola crisis.
Alufer currently holds a ratified mining convention in the Bel Air Project of western Guinea, as well as licenses linked to the Labé Project in central Guinea.
Alufer has declared over 3 billion tonnes of mineral resource in terms of the JORC Code at the Bel Air and Labé projects, and expects to produce 5.5 metric tonnes per annum (Mpta) of bauxite from Bel Air within 18 to 24 months.
AFC’s high calibre consortium partners include Orion Mine Finance, a specialist mining investor, with over US$2.5 billion of assets under management, and Resource Capital Funds, a mining focused private equity firm with over US$2.5 billion under management, as well as existing shareholders.
AFC is a dynamic, international investment grade multilateral finance institution whose mission it is to help bridge Africa’s significant infrastructure gap whilst delivering competitive financial returns, robust economic growth and positive social impact.
Established in 2007 to be the catalyst for private sector infrastructure investment across Africa, AFC is now the second highest investment grade rated multilateral financial institution in Africa with an A3/P2 (Stable outlook) rating from Moody’s Investors Service. A successful borrowing programme has raised more than US$3.5 billion for AFC’s activities, including the Corporation’s debut US$750 million Eurobond issue which was over 6 times oversubscribed. In terms of impact, AFC has invested more than US$ 4 billion in projects across 26 African countries to date.
AFC’s investment approach combines specialist industry expertise with a focus on financial and technical advisory, project structuring, project development and risk capital tailored to addressing Africa’s unique infrastructure development needs in the core sectors of power, natural resources, heavy industry, transport, and telecommunications.
Nkemnji Global Tech
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