Identifier
Created
Classification
Origin
06CONAKRY1696
2006-11-15 12:18:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Conakry
Cable title:
GLOBAL ALUMINA ENTERS NEW PARTNERSHIP TO GAIN NECESSARY
how-toVZCZCXRO9474 RR RUEHMA RUEHPA DE RUEHRY #1696/01 3191218 ZNR UUUUU ZZH R 151218Z NOV 06 FM AMEMBASSY CONAKRY TO RUEHC/SECSTATE WASHDC 0220 INFO RUEHAD/AMEMBASSY ABU DHABI 0007 RUEHBY/AMEMBASSY CANBERRA 0011 RUEHLO/AMEMBASSY LONDON 0127 RUEHZK/ECOWAS COLLECTIVE RUEATRS/DEPT OF TREASURY WASHINGTON DC RUCPDOC/USDOC WASHDC
UNCLAS SECTION 01 OF 02 CONAKRY 001696
SIPDIS
SIPDIS
SENSITIVE
STATE FOR EB/ESC KRIOS, AF/EPS, AF/W
E.O. 12598: N/A
TAGS: EMIN ETRD ECON PGOV GV
SUBJECT: GLOBAL ALUMINA ENTERS NEW PARTNERSHIP TO GAIN NECESSARY
EXPERTISE AND CAPITAL
PROPRIETARY INFORMATION NOT TO BE POSTED ON THE INTERNET
REF: Conakry 1622
UNCLAS SECTION 01 OF 02 CONAKRY 001696
SIPDIS
SIPDIS
SENSITIVE
STATE FOR EB/ESC KRIOS, AF/EPS, AF/W
E.O. 12598: N/A
TAGS: EMIN ETRD ECON PGOV GV
SUBJECT: GLOBAL ALUMINA ENTERS NEW PARTNERSHIP TO GAIN NECESSARY
EXPERTISE AND CAPITAL
PROPRIETARY INFORMATION NOT TO BE POSTED ON THE INTERNET
REF: Conakry 1622
1. (SBU/PROPIN) Summary. Global Alumina is entering into a new
strategic partnership, via joint venture with BHP Billiton (BHP),
one of the world's leading alumina producers, and Dubai Aluminum
(DUBAL),owner of one of the world's largest alumina smelters. Once
the BHP board approves the deal, the three partners will share
interest in the Global Alumina refinery in Guinea.
2. (SBU/PROPIN) The move is a genuine partnership, with equal
shares to be held by each company. It stabilizes the Global Alumina
refinery project, as the two new partners serve as guarantors.
Leveraging its vast experience in the sector, BHP Billiton will
manage the project. Long interested in a full bauxite-to-aluminum
project, the host government was pleased by the November 2
announcement, because in addition to financing the refinery, the two
new partners bring strong experience in alumina-to-aluminum
production. End summary.
3. (SBU/PROPIN) In a 10 November meeting with the Ambassador,
Global Alumina's Haskell Ward and Brian Herlihy shared details of
Global's recent entry into strategic partnership with BHP Billiton
and DUBAL, and the impact of the partnership on the refinery
project. While the pre-construction phase of Global's refinery
project has progressed well, Global was compelled to find strategic
partners to share the project's 20 million USD per-month expenses.
The project was initially estimated to cost 2.3 billion USD, but is
now expected to exceed 3.1 billion USD. After considering eight
potential partners, Global agreed to collaborate with BHP Billiton
and DUBAL in an equity partnership with each company holding one
third interest in the refinery. BHP Billition and DUBAL will serve
as the project's guarantors, with each providing security for loans
in excess of 50 million USD. Citing the experience both partners
bring, Global's representatives were clearly pleased with the
agreement.
--------------
BHP BILLITON
--------------
4. (SBU/PROPIN) BHP Billition is a dual-listed company with
Australian and British corporate identity. In addition to its
equity stake in the Global Alumina project, BHP will purchase
alumina from the refinery to be processed elsewhere into aluminum.
There are no current plans for a smelter project in Guinea.
Although BHP's board of directors has not yet accepted the deal, it
is expected to do so. (BHP Billiton is already present in Guinea as
part of EuroNima, a consortium of mining companies that hopes to
extract high quality iron ore in the Mount Nimba region.)
5. (SBU/PROPIN) The output of the alumina refinery will add another
million tons per year to BHP's worldwide alumina output, which was
4.1 million tons last year. An industry leader in ecologically
sound mining projects and their attendant community development
projects, BHP will be project manager for the development and
construction of the refinery, rail upgrades, and port construction.
Once the project is completed, BHP will continue to operate the
plant. The Global refinery is to be closely modeled on BHP's
successful projects in Mozambique.
--------------
DUBAL
--------------
5. (SBU/PROPIN) Wholly owned by the government of the United Arab
Emirates, Dubai Aluminum Company (DUBAL) will share its one-third
interest in the project with the investment company Mubadala
Development, which is also wholly owned by the government of the
United Arab Emirates. Their interest is to be shared 25 percent
DUBAL, and 8.3 percent Mubadala. DUBAL owns of one of the world's
largest alumina smelters and produces and exports primary aluminum
products to more than 40 countries. DUBAL was already a player in
Guinea's bauxite sector, purchasing all its Guinean bauxite from
HALCO (i.e., ALCOA and ALCAN) which it processes in facilities
worldwide.
--------------
COMMENT
--------------
CONAKRY 00001696 002 OF 002
6. (SBU/PROPIN) Global Alumina has grown from a start-up company
with big dreams to a real player in the alumina industry. The
partnership with DUBAL and BHP Billiton brings Global both financing
and credibility. Some finer details persist such as intellectual
property rights issues related to the refining process itself, which
is owned by Global, and leveraging of Global's concession to
solidify the agreement on infrastructure sharing with the government
of Guinea. On the whole, however, the partnership is sound and all
but ensures the refinery will be completed. Moreover, Guinea gains
a company with the expertise to deliver one of its fondest desires:
full bauxite-to-aluminum production, even if there are, at present,
no plans to do this soup-to-nuts operation in Guinea.
MCDONALD
SIPDIS
SIPDIS
SENSITIVE
STATE FOR EB/ESC KRIOS, AF/EPS, AF/W
E.O. 12598: N/A
TAGS: EMIN ETRD ECON PGOV GV
SUBJECT: GLOBAL ALUMINA ENTERS NEW PARTNERSHIP TO GAIN NECESSARY
EXPERTISE AND CAPITAL
PROPRIETARY INFORMATION NOT TO BE POSTED ON THE INTERNET
REF: Conakry 1622
1. (SBU/PROPIN) Summary. Global Alumina is entering into a new
strategic partnership, via joint venture with BHP Billiton (BHP),
one of the world's leading alumina producers, and Dubai Aluminum
(DUBAL),owner of one of the world's largest alumina smelters. Once
the BHP board approves the deal, the three partners will share
interest in the Global Alumina refinery in Guinea.
2. (SBU/PROPIN) The move is a genuine partnership, with equal
shares to be held by each company. It stabilizes the Global Alumina
refinery project, as the two new partners serve as guarantors.
Leveraging its vast experience in the sector, BHP Billiton will
manage the project. Long interested in a full bauxite-to-aluminum
project, the host government was pleased by the November 2
announcement, because in addition to financing the refinery, the two
new partners bring strong experience in alumina-to-aluminum
production. End summary.
3. (SBU/PROPIN) In a 10 November meeting with the Ambassador,
Global Alumina's Haskell Ward and Brian Herlihy shared details of
Global's recent entry into strategic partnership with BHP Billiton
and DUBAL, and the impact of the partnership on the refinery
project. While the pre-construction phase of Global's refinery
project has progressed well, Global was compelled to find strategic
partners to share the project's 20 million USD per-month expenses.
The project was initially estimated to cost 2.3 billion USD, but is
now expected to exceed 3.1 billion USD. After considering eight
potential partners, Global agreed to collaborate with BHP Billiton
and DUBAL in an equity partnership with each company holding one
third interest in the refinery. BHP Billition and DUBAL will serve
as the project's guarantors, with each providing security for loans
in excess of 50 million USD. Citing the experience both partners
bring, Global's representatives were clearly pleased with the
agreement.
--------------
BHP BILLITON
--------------
4. (SBU/PROPIN) BHP Billition is a dual-listed company with
Australian and British corporate identity. In addition to its
equity stake in the Global Alumina project, BHP will purchase
alumina from the refinery to be processed elsewhere into aluminum.
There are no current plans for a smelter project in Guinea.
Although BHP's board of directors has not yet accepted the deal, it
is expected to do so. (BHP Billiton is already present in Guinea as
part of EuroNima, a consortium of mining companies that hopes to
extract high quality iron ore in the Mount Nimba region.)
5. (SBU/PROPIN) The output of the alumina refinery will add another
million tons per year to BHP's worldwide alumina output, which was
4.1 million tons last year. An industry leader in ecologically
sound mining projects and their attendant community development
projects, BHP will be project manager for the development and
construction of the refinery, rail upgrades, and port construction.
Once the project is completed, BHP will continue to operate the
plant. The Global refinery is to be closely modeled on BHP's
successful projects in Mozambique.
--------------
DUBAL
--------------
5. (SBU/PROPIN) Wholly owned by the government of the United Arab
Emirates, Dubai Aluminum Company (DUBAL) will share its one-third
interest in the project with the investment company Mubadala
Development, which is also wholly owned by the government of the
United Arab Emirates. Their interest is to be shared 25 percent
DUBAL, and 8.3 percent Mubadala. DUBAL owns of one of the world's
largest alumina smelters and produces and exports primary aluminum
products to more than 40 countries. DUBAL was already a player in
Guinea's bauxite sector, purchasing all its Guinean bauxite from
HALCO (i.e., ALCOA and ALCAN) which it processes in facilities
worldwide.
--------------
COMMENT
--------------
CONAKRY 00001696 002 OF 002
6. (SBU/PROPIN) Global Alumina has grown from a start-up company
with big dreams to a real player in the alumina industry. The
partnership with DUBAL and BHP Billiton brings Global both financing
and credibility. Some finer details persist such as intellectual
property rights issues related to the refining process itself, which
is owned by Global, and leveraging of Global's concession to
solidify the agreement on infrastructure sharing with the government
of Guinea. On the whole, however, the partnership is sound and all
but ensures the refinery will be completed. Moreover, Guinea gains
a company with the expertise to deliver one of its fondest desires:
full bauxite-to-aluminum production, even if there are, at present,
no plans to do this soup-to-nuts operation in Guinea.
MCDONALD