Bauxite supply to China could come under pressure due to a coup d’état in West African nation Guinea. Over 80pc of the West African country’s overseas sales are to China.
According to media reports, military forces imprisoned president Alpha Conde on Sunday evening. The coup announced the dissolution of the government, suspension of the constitution, and closed border. The political instability may lead to a short-term supply-demand mismatch in China and other countries, supporting global aluminium prices.
The aluminium spot prices in China were at CNY21,343.33 ($3,306.67) on Sep 3 against $2,696/mt on LME on the same day.
Global bauxite production is projected at 372.8mn mt for 2021, up by 3.8pc from 2020. Australia and Guinea are expected to be the key contributors, as per GlobalData dated Aug 20 report. Australia and Guinea account for eight out of 17 planned projects. Guinea shipped 82.4mn mt of mineral globally in 2020.
In other updates, Guinea recently granted permission to Societe Miniere de Boke (SMB) to build and operate a 135kms railway for 33 years. The $1bn railway project was expected to carry bauxite from Santou II and Houda blocks to Port of Dapilon.