Guinea: The New Foundation of China’s Bauxite Industry

Guinea possesses the world’s largest reserves of bauxite—the raw material needed to make aluminum—with nearly one-third of the earth’s known deposits. Guinea’s rapid rise as a global bauxite exporter stems from its relative political stability following the 2010 election. After the election, foreign investors including Russian, American, and European firms as well as the World Bank invested in bauxite mining in the country. Major global firms are now active in the sector, including Rio Tinto, Alcoa and Rusal.

Chinese firms are also making their mark, and have now become the largest bauxite sector investors in the country. Guinea’s many Chinese-led development projects illustrate how instrumental Chinese companies are in enabling Guinea’s bauxite mining boom, and how integrated Chinese companies are across the full aluminum supply chain down to the raw material level. In Guinea, China has applied a wide-reaching approach to their support for the bauxite industry. Not only have Chinese companies and banks invested in bauxite mining operations, which they own and operate, but they have also provided much of the financing and construction of infrastructure and energy supply needed to support the mining industry’s growth. This has enabled the swift expansion of bauxite mining in Guinea, which has, in turn, strengthened Guinea’s position as a major supplier to Chinese industry.

This includes a commitment of $20 billion in financing for Chinese firms in an infrastructure-for-bauxite deal with Guinean government. The deal was led by the majority state-owned Industrial and Commercial Bank of China (ICBC), and it includes infrastructure for three mines operated by state-owned companies China Power Investment, Chinalco and China Henan International Cooperation. The majority of financing under the deal will go towards supporting mining-focused infrastructure projects.

Other financial support from China includes multiple loans totaling over $2.3 billion from the Export-Import Bank of China to develop hydroelectric dams that will provide power for mining companies. The China-Africa Industrial Cooperation Fund, which is funded by the State Administration of Foreign Exchange and China Eximbank, has entered a $200 million facility agreement for Chinese-Singaporean conglomerate SMB-Winning to purchase bauxite from Guinea. Chinese firms have invested significantly in infrastructure such as railways and ports, which allow companies to more easily transport resources for export to Chinese markets. This includes, for instance, China Railway Construction Corporation’s involvement in the 112 km Dapilon-Santou railway, which connects the bauxite-rich Boké region to the port at Dapilon.

In 2019, 98% of the bauxite China imported from Guinea came from partially Chinese-owned mining consortiums. Almost all Guinean bauxite is shipped by freight on dedicated vessels to Yantai port in the coastal province of Shandong. Most of the Chinese-backed bauxite projects in Guinea are owned by vertically integrated aluminum refining companies based in Shandong. For example, Hongqiao holds a stake in the major SMB-Winning project in Boké region via its subsidiary Weiqiao Aluminum and Power Company. Weiqiao purchases 17 million tonnes of bauxite per year from the project, delivered to its own refineries in Shandong. Aluminum from these refineries then enters various supply chains, including auto manufacturing, which links Chinese miners and producers to global brands.

The Boké region in western Guinea is at the center of the bauxite sector’s recent growth, and companies of various nationality are present in the area. The region, which is home to roughly 1.3 million people, has experienced significant adverse impacts resulting from industrial mining, including widespread destruction of agricultural land; displacement of customary landowners without the provision of adequate compensation or alternative land; pollution of water sources; reduced air quality; and vast deforestation.  Frustration over the impacts of bauxite mining and the lack of benefits flowing to the people of Boké has resulted in civil unrest in recent years, which was met by violence from Guinea’s security forces.

The communities in Boké are highly dependent on their natural environment for income generation and sustenance, with more than 890,000 people (roughly 70% of the region’s total population) reliant on agriculture for their livelihood. Much of Boké is under cultivation by farming families that have been there for many generations. In 2019, however, a study commissioned by the Guinean Ministry of Mines estimated that bauxite mining will have destroyed 858 square kilometers of agricultural land in Boké, an area larger than New York City, by 2045.

The land acquisition process for bauxite mines in Guinea has often violated the rights of individuals and communities. Rural land tenure in Guinea is typically organized under customary law, without formal land registration. Although Guinean law can be interpreted to recognize customary land tenure, most rural households do not have formal titles to their land because the government has not rolled out a formal land registration process to formalize those rights.

Mining companies have exploited these regulatory weaknesses by acquiring land without the consent of customary landowners, often paying insufficient or no compensation for land and failing to provide adequate support to families to re-establish their livelihoods. In the long term, this approach has left many farmers without the resources, support or training needed to identify new land or invest in alternative income sources, driving families further into poverty.

Bauxite mining in Guinea has had major impacts on communities’ ability to access water needed for drinking, washing, and cooking. This is a result of construction of mining infrastructure that blocks waterways, as well as from the pollution of rivers and streams by sediment runoff from surface mining. Satellite imagery and data collection from the ground in 2019 showed that the mine of Compagne des Bauxite de Guinee (CBG), which is majority owned by Alcoa, Rio Tinto and Dadco, had polluted or destroyed 91 water sources that serve 17 villages. The dust from bauxite mining and processing has also significantly impacted the air quality and health of local communities. Limited government monitoring and an absence of public data from mining companies on air quality makes these impacts difficult to quantify, but community members and local health workers report increased respiratory illness and have concerns about long-term health impacts.

Environmental groups have also warned that deforestation due to bauxite mining has had devastating impacts on biodiversity, including threatening thousands of critically endangered West African chimpanzees. While these impacts are sector-wide and not specific to Chinese investment, the existing scope of Chinese involvement in Guinean bauxite supply chains means that Chinese corporate and financial exposure to these issues is significant, and growing.

Companies sourcing aluminum produced with Guinean bauxite have begun to take note of these issues. Several car companies, including BMW, Audi/Volkswagen and Daimler, have expressed concern about the human rights impacts of bauxite mining in Guinea through letters to mining companies and industry associations. In January 2021, Drive Sustainability, a coalition of 11 car companies, including BMW, Daimler, Ford, Toyota, Volkswagen, and Volvo, wrote to The Aluminum Association, an association of dozens of aluminum producers, in order “to express concern about the situation in Guinea,” to solicit information on members’ human rights due diligence efforts. 

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