Guinean coup d’état leader Mamadi Dumbuya requested the mining companies to resume production and assured that curfew in the mining area will be lifted.
Guinea is rich in bauxite and iron ore resources and is a bauxite exporter to China. The aluminium prices soaring on the Shanghai Metal exchange to a 10-year high on Monday morning due to uncertainty lead by the mutiny in the West African nation on Sept 5. Amid supply concerns, LME three-month aluminium rose by 0.83pc to $2,754.75/mt. While Shanghai Aluminium rose by 2.61pc to CNY21,850/mt($4,313.85/mt) on Monday.
According to media reports, Guinea closed its airport to bar the entry and exit of foreign nationals. Production shipments and exports are functioning smoothly.
Imported bauxite stocks at domestic alumina plants in Shandong and other inland destinations will last for 3-6months or even more. Market participants expect the impact of the coup to remain for a short term.
Several alumina plants in China have reduced production due to power cuts, so the demand for bauxite has shrunk. China imported 64.41mn mt of aluminium ore and concentrates in the Jan-June period, of which 35.39mn mt was imported from Guinea, accounting for about 55pc. China imported 19.98mn mt or 31pc from Australia and over 8.86mn mt or 14pc from Indonesia. If the coup lasts longer, the export of Guinea’s minerals may be affected. In this case, the increased imports from Australia or Indonesia may push ore prices to rise further.