EGA’s subsidiary Guinea Alumina Corp. (GAC) has successfully closed the Republic of Guinea’s largest-ever project financing for a greenfield mining project.
The USD750 million loan has a tenor of 12 to 14 years and was extended by development finance institutions, export credit agencies and international commercial banks. The loan represents the first time multilateral institutions and international commercial banks have participated together in a project financing for a greenfield mining project in Guinea.
The financing supports the development of a bauxite mine as well as related transport infrastructure, including an upgrade to an existing multi-user rail system and the development of a port, in the first phase of GAC’s investment in the country. The mine has some of the world’s best quality resources of bauxite – the primary input in the production of alumina, the feedstock for aluminium smelters.
The USD1.4 billion project is one of the largest greenfield investments in Guinea in the last 40 years and is an integral part of EGA’s strategy to integrate upstream in the aluminium value chain. A later phase of the project envisages the construction of an alumina refinery.
The International Finance Corporation (IFC) has committed total financing of USD330m including syndicated debt from commercial banks. The African Development Bank (AfDB) and Export Development Canada (EDC) have committed USD100m and USD150m respectively. The remaining funds have been extended by two European development finance institutions including PIDG Ltd’s company The Emerging Africa Infrastructure Fund Limited, and commercial banks covered from political risk.
Guinea is the world’s largest bauxite mineral resource holder and GAC’s production will contribute further to the country’s position as a global bauxite supplier. Production from the GAC project is expected to begin during the second half of 2019 and is expected to be 12 million tonnes of bauxite per year once steady state operations are achieved. The construction of the GAC project is more than 90% complete.