Mining company Compagnie des Bauxites de Guinée (CBG), which is 49% owned by the Guinean State, alongside US-registered Halco Mining, a consortium comprising Rio Tinto-Alcan, Alcoa and Dadco Investments, has entered into a memorandum of understanding (MoU) with ASX-listed Lindian Resources.
The MoU is aimed at exploring the supply of bauxite from Lindian's Gaoual bauxite project in north-western Guinea within the Boké Bauxite Belt to supplement CBG's yearly bauxite production and potentially establish a sales contract between Lindian and CBG.
CBG is recognised as one of the world's largest single producers of bauxite, with its primary operations centred in Guinea. The MoU outlines several key provisions, among which is a feasibility study commitment.
In this regard, Lindian has committed to completing a feasibility study on the Gaoual project, ensuring that the study aligns with CBG's criteria and complies with the environmental and social standards mandated for CBG's operations.
Gaoual boasts a Joint Ore Reserves Committee 2012 indicated mineral resource estimate of 102-million tonnes, with a high-grade tonnage of 84-million tonnes containing 51.2% aluminium oxide (Al2O3). In 2021, screening test work confirmed that high-grade samples from Gaoual exhibited an 8.6% increase in alumina grade from 53.8% Al2O3 to 58.4% Al2O3 and a 71.4% decrease in silica grade from 9.8% silicon dioxide (SiO2) to 2.8% SiO2.
The MoU outlines the scope of collaboration, encompassing exploration of various methods for operating, processing and transporting ore from the Gaoual project to CBG's infrastructure. It also covers aspects such as procurement, quantity and quality determination, selling prices, price adjustment mechanisms, penalties and bonuses, as well as payments between the parties.
The parties have agreed to negotiate in good faith a possible contract for the sale of bauxite within two years from the start of the MoU.
Lindian has committed to adhering to the Aluminium Stewardship Initiative standard and International Finance Corporation performance standards during the Ffeasibility study, commissioning, and operation phases. These standards align with CBG's existing obligations.
"We have been advancing discussions with them for a number of years on the potential development of Guinea’s next Conglomerate Bauxite project and this MoU marks a very meaningful step in this process.
"As one of Guinea’s most established bauxite producers with extensive mining operations and infrastructure access, a potential partnership delivers obvious benefits to all stakeholders, most importantly the local community and the government of Guinea. The MoU provides an excellent framework to rapidly advance Gaoual,” Lindian executive chairperson Asimwe Kabunga said on September 4.