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Guinea coup attempt sparks concerns for bauxite, iron ore miners

A military uprising in the West African nation of Guinea has sparked concerns about a potential supply squeeze for bauxite, a key raw material in aluminium production, and also cast a shadow on Rio Tinto’s plans to develop its Simandou iron ore project in the country.

Hours after gunfire broke out at the presidential palace in Guinea’s capital on Sunday, a group of soldiers claimed to have ousted the country’s long-serving president, dissolved its constitution and shut its land and air borders.

The Guinean military says it has detained President Alpha Conde.

The Guinean military says it has detained President Alpha Conde.Credit:AP

Mining companies and resources analysts on Monday were closely watching the unfolding situation and what it could mean for the global supply of bauxite, the raw material used to make alumina and eventually aluminium.

Anglo-Australian mining giant Rio Tinto owns a 45 per cent stake in Halco Mining, the majority owner of the Compagnie des Bauxites de Guinée SA (CBG) bauxite operation in Guinea. ASX-listed Alumina Limited and US aluminium giant Alcoa’s jointly owned Alcoa World Alumina and Chemicals (AWAC) hold another 45 per cent stake in Halco.

“We’re monitoring the situation to assess any potential impacts,” an Alcoa spokeswoman said.

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Australia and Guinea are two of the world’s top exporters of bauxite. In 2020, Australia’s bauxite operations produced 102 million tonnes of the commodity, of which 37 million tonnes were exported.

Commonwealth Bank mining and energy commodities analyst Vivek Dhar said Australian companies may benefit from the prospect of rising bauxite prices.

“If the political instability in Guinea disrupts its bauxite exports, we expect bauxite prices to lift,” he said. “Australia stands to benefit the most given its position as the world’s second-largest bauxite exporter.”

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