May 14 2004
Alcoa World Alumina LLC and Alcan Inc. today announced the signing of a memorandum of understanding (MOU) to assess the feasibility of developing jointly a 1.5 million metric tonne per year (mtpy) alumina refinery in the Republic of Guinea, West Africa.
Alcoa World Alumina and Alcan, through subsidiaries, each hold a 43% interest in Halco (Mining) Inc., which in turn is a 51% owner of Compagnie des Bauxites de Guinee (CBG) that currently mines bauxite for export in the Boke region of the country. The Government of the Republic of Guinea holds the remaining 49% of CBG. CBG has exclusive rights through 2038 to bauxite reserves and resources in a 10,000 square mile area in the northwestern part of the country. Alcoa World Alumina, Alcan and other Halco shareholders acquire CBG bauxite for use in their individual businesses.
Alcoa and Alcan will immediately undertake a detailed feasibility study, furthering a feasibility assessment previously done by Alcoa, to assess the various aspects of the project. This study is expected to be completed by mid 2005, and alumina production could be expected by early 2008. The refinery, which would be operated by Alcoa, would be expected to have an initial 1.5 million mtpy capacity and it would be capable of expansion beyond this level. Alcoa and Alcan would market their respective alumina off-take independently. The refinery would incorporate the latest technology and world-class operating and management systems. Alcoa and Alcan will work closely with the Government of the Republic of Guinea on the roles and participation of CBG and the Government in this new project. Alcoa and Alcan have had informal discussions with the International Finance Corporation (IFC) concerning a possible investment in the project.
Given the substantial quantity and the high quality of bauxite reserves, Alcoa and Alcan believe Guinea represents an attractive location for an alumina refinery. In addition, the long-standing involvement of Alcoa and Alcan in CBG places them in a uniquely favourable position to develop such a project.
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