BHP buys into bauxite project

BHP Billiton on Friday announced the acquisition of a 33.3% interest in Global Alumina’s Sangaredi Refinery Project in Guinea, West Africa, for a consideration of $140m.

The project comprises the design, construction and operation of a 3Mtpa alumina refinery, 9Mtpa bauxite mine, and associated infrastructure.

A mining concession covering 690km has been secured and a mineral resource of 233 million tonnes bauxite (39% Available Alumina and 1% Reactive Silica) has been reported.

The company said this is considered sufficient to support the development, but further exploration work is underway to increase the resource size.

The proposed refinery site is 100km inland from Kamsar and has the benefit of access to existing rail infrastructure linking it to the Port of Kamsar, where dedicated facilities are already under construction.

Graeme Hunt, President Aluminium for BHP Billiton, said: “This project provides the Joint Venture partners with access to a long life, low cost, world class resource base and represents an excellent opportunity for BHP Billiton to continue to grow its business in a value accretive manner.”

“In view of BHP Billiton’s other exploration interests in Guinea, this project also offers us valuable experience of operating in this first tier minerals province,” he added.

As part of the agreement, BHP Billiton will appoint the Chief Executive Officer and Chief Financial Officer of the Joint Venture Company (JVC) and will enter into a services agreement with the JVC for the development, construction and operation of the project, which will be operated in accordance with BHP Billiton standards.

Global Alumina will now hold a 33.3% equity interest in the Sangaredi Refinery Project, Dubai Aluminium Company Limited a 25% interest and Mubadala Development Company PJSC 8.3%.

Information from: www.fin24.co.za