Bauxite mining company Alliance Mining Commodities (AMC) earlier this month signed a landmark rail agreement with the government of Guinea, in West Africa, confirming a viable infrastructure solution for its 90%-owned Koumbia Bauxite project in the country.

The rail deal follows the completion of the project’s definitive feasibility study in November last year and the submission of an application for environmental and social impact assessments in March this year.

“The agreement comprises two options for rail transportation of the mine’s bauxite – the construction of a 100 km railway that connects with an existing 25 km section of rail, owned by the Guinea government and operated by Compagnie Bauxite de Guinée (CBG), or the construction of a 125 km standalone rail line extending from the mine site to a port on the Rio Nunez river, in Guinea’s Boké region,” AMC states.

AMC has been in discussion with the govern- ment of Guinea and the CBG for some months regarding access to the existing rail line, but an access arrangement that adequately addresses all the technical and operational issues involved in sharing a line has not been finalised yet.

“Capacity has been the key issue, as the potential and planned production for the Boké region far exceeds the potential of the existing rail line. AMC has never disputed this and has maintained that passing bays would enable a significant capacity increase. It has also recognised that line duplication would be required in future,” the company tells Mining Weekly.

Further, AMC’s assessment of the existing line confirmed that it was in a poor condition; the existing rolling stock used on the line requires zero gradient on all passing bays and would not allow turnouts in any radius on the track, which reduces flexibility for connection and operation.

The agreement between AMC and the Guinea government states that discussions will continue for a further six months in an attempt to conclude a suitable arrangement for all parties. However, if AMC is unable to conclude the agreement by the end of this period, it can proceed with building its own standalone line.

The benefits of using the existing rail line include lower upfront capital expenditure for AMC.

However, AMC states that while a stand-alone line would cost the company an addi-tional $70-million in capital expenditure, the company would prefer to construct the standalone rail line, as it would provide oper-ational advantages for the project.

The benefits of the standalone rail line include increased axle load and a substantially higher rail capacity, enabling the project to continue increasing production in future.

In addition, AMC would also have a completely new rail network, as opposed to having a portion that is old and in a poor condition. The mining company would also have complete operational control over the entire rail network and there would be a potential revenue stream generated from the granting of third-party access to the line.

Constructing a standalone rail line would also hold benefits for the Guinea government, such as a substantial increase in a rail capacity in a central corridor that contains many projects, which would potentially require rail capacity.

“A standalone rail line would create a possibility for projects to progress, which would not have been feasible if their developers had to fully fund a rail line.”