VISIT TO GUINEA'S BAUXITE HEARTLAND

UNCLAS SECTION 01 OF 02 CONAKRY 001054 SIPDIS SIPDIS SENSITIVE E.O. 12598: N/A TAGS: EMIN ECON ETRD PGOV GV SUBJECT: VISIT TO GUINEA'S BAUXITE HEARTLAND ¶1. (SBU) SUMMARY. In the Boke region, Guinea's bauxite companies operate around the clock, mining and exporting thousand of tons of high quality ore, while spinning off benefits to the local population. Testifying to bauxite's importance to the new government, a close friend of the prime minister was recently appointed governor. END SUMMARY. ¶2. (SBU) On September 10 and 11, Econoff visited government officials and mining projects in the heart of Guinea's bauxite country, Boke and Sangaredi (meeting with Global Alumina reported septel). -------------- Meeting with the Governor of Boke -------------- ¶3. (SBU) In a short meeting, the newly appointed Governor of the Boke region, M. Siafa Beavogui, emphasized his positive feelings towards the U.S. and hope for continued good relations between Guinea and the U.S. He said Boke is an important region because of its immense reserves of high quality bauxite and its port in Kamsar, the second largest port in Guinea. He identified the Global Alumina project, as well as a new RusAL alumina factory, near Fria, as important new investments in the region. ¶4. (SBU) M. Beavogui went on to outline the intractable problems he is facing, from lack of electricity and water, to lack of equipment for police forces throughout Boke. The Governor stated that while mining companies have historically provided electricity to the surrounding communities, population growth has now outstripped supply, resulting in widespread electrical shortages. ¶5. (SBU) The Governor closed the meeting by noting that he is a longtime colleague and friend of current Prime Minister Lansana Kouyat. When he was Chef de Cabinet of the Ministry of Foreign Affairs in Conakry and Kouyate was Ambassador in Cairo, he said he helped speed up Kouyate's paperwork to work at the U.N., and it was during this time that they became close friends. -------------- Onward to the Bauxite Mines! -------------- ¶6. (SBU) Upon arrival in Sangaredi, Econoff met with officials of the Companie de Bauxite de Guinea (CBG); the Director of Mines, M. Roger Thea, and the Superintendent of Mining, M. Sekou Berete. M. Thea stated that CBG is owned by the government (49%) in partnership with Alcoa, Alcan and others (51%),and that CBG has the largest bauxite mining operation in Guinea with reserves estimated to last for hundreds of years. ¶7. (SBU) M. Thea classified reserves as 'exportable' and 'non-exportable,' basing the distinction on the percentage of bauxite contained in the rock. Bauxite purity of 53% and above is considered suitable for export while less than that is considered non-exportable. The Director said that proven exportable reserves could last until 2025, and non-exportable reserves could last for centuries. ¶8. (SBU) The bauxite is strip mined around the town of Sangaredi 24 hours day, seven days a week. After stripping off somewhere between 8 and 70 meters of rock, the company ships the bauxite by rail to the port of Kamsar (135 km away) for processing and export. M. Berete asserted that CBG is very aware of its environmental responsibilities and he identified several rehabilitated mining areas. ¶9. (SBU) Econoff also met with, Charles Wickwire, the Construction Manager for Bechtel at the Global Alumina (GA) refinery site just outside of Sangaredi. (See septel for report of this visit.) When asked about the environmental rehabilitation for the operations at the Global Alumina plant, Mr. Wickwire said that Bechtel was going to completely rehabilitate all mining areas, contrasting Bechtel's work with that of CBG which he dismissed as not serious environmental rehabilitation. ¶10. (SBU) Currently, CBG is in the middle of moving its main offices and maintenance facilities to a new location so that they can mine the area (60% purity) where the facilities are currently located. Mr. Berete confided that eventually, they want to do the same thing to the town of Sangaredi, currently home to several thousand people. ¶11. (SBU) CBG stressed the importance of maintaining good relations with the surrounding communities. CBG provides some water and electricity to the local community as well as passenger rail service from Sangaredi to Boke to Kamsar, spaced between six daily bauxite trains. Mr. Berete said that by providing passenger service for a token fee, the policy resulted in local communities protecting the railroad instead of looting it. ¶12. (SBU) Mr. Thea stated that CBG's average annual bauxite exports CONAKRY 00001054 002 OF 002 are approximately 13 million tons, but that this figure will not be reached in 2007 due to the two-month forced closure of the mine during the strike in January and February 2007. He went on to say that there were other areas CBG would like to mine, but that the locations lack the necessary infrastructure. The Director said this is one reason why CBG supports the Trans-Guinean rail line proposed by Rio Tinto. He said that once the line is operational, CBG could expand mining to other areas of Guinea. ¶13. (SBU) Director Thea said that 30% of CBG's bauxite exports are destined to the U.S. He also revealed that CBG's contract with its partners provides for a duty-free price to CBG, and therefore, he saw no reason to use the provisions of the African Trade and Development Act (AGOA). (NOTE: This does not explain why CBG's partners do not use AGOA to reduce the cost of importing the bauxite into the U.S. END NOTE.) BROKENSHIRE