WINDHOEK --Alumina prices were ruling at between US$260 and US$275 per tonne Monday, up from US$230 last week amid fears of tighter supplies, as Guinea’s national strike called by unions and opposition political parties to force the country’s leader to step down entered its 13th day.

The production of bauxite, which when refined becomes alumina -- the raw material used for making aluminium, is at a standstill after workers at Guinea`s national bauxite company, Compagnie Des Bauxites de Guinée, halted production at the Boké mine and Kamsar and Sangaredi facilities as national protests escalate.

The strike has also halted trains carrying bauxite for export to the port of Kamsar and reduced the number of ships loading at the port.

The West African country is the world's biggest exporter of bauxite, whose end-product aluminium is the light metal used widely in cars, aircraft, buildings, packaging and consumer goods.

Mineral resources, chiefly bauxite and gold, already represent 85 percent of Guinea’s exports, more than 25 percent of government revenues and 17 percent of gross domestic product.

"The main reason for the tight market is Guinea's (Compagnie Des Bauxites de Guinée) CBG is on strike again," Yisha Xue, head of London-based China Metals, was quoted as saying by Reuters. “Guinea supplies about 1 million tonnes of bauxite a month to Western alumina producers ... If those supplies are cut, alumina production will fall and the price will go up, at least in the short term.”

CBG is operated by US aluminium giant Alcoa World Alumina through its Halco venture with Canada’s Alcan and privately-owned Dadco. Halco owns 51 percent of CBG with Guinea’s government holding the remaining stake.

The company produces just over 14 million tons of wet bauxite a year from its mine in the northern region of Boke, and exports some 13 million tons a year of dried bauxite. Guinea holds an estimated 25 billion tonnes of bauxite resources, roughly a third of the world’s total.

President Lansana Conte, who seized power in a 1984 coup, is accused of being unfit to rule. In a recent televised statement he said he would slash fuel prices, halt food exports, improve teachers` pay and tackle police corruption, but union leaders dismissed the offer at a stormy meeting in the capital Conakry and voted to step up their action.

"CBG is having a strike and that will have a huge impact on the whole market. It has a large impact on the big companies and that is why I think it will be solved relatively quickly," an alumina trader was quoted by Reuters as saying. “But I don't really see it sustained at those levels ... Because the moment the market goes close to US$350 then production that has been idled will be ramped up again."

Reuters quotes industry sources as saying operations at another Guinean mining town, Fria, where Russia's Rusal runs the Friguia bauxite and alumina complex, had also been reduced to a minimum by the strike action.

The agency said much also depended on the aluminium price, which on the London Metal Exchange was trading at around US$2,700 a tonne on Friday.

"If it stays around the US$2,700 range people will produce whatever they can and the Chinese will start again and put more alumina out there," it quotes a trader as saying.

However Dick Evans, president and chief executive of Alcan, which employs 3,000 people in Guinea, downplayed the possible impact. He told Reuters: "There could be some minor disruptions in our supply chain, but I don’t see that cascading down to a major interruption in terms of smelters or anything of that nature."

Guinea general strikers threaten bauxite production

WINDHOEK --Union leaders in cash strapped Guinea, who are leading a general strike to oust President Lansana Conte, have threatened to bring out the West African country’s bauxite industry on Thursday, as they seek to increase pressure on the ageing, diabetic leader to step down.

Police reportedly fired warning shots in the capital Conakry Tuesday when they clashed with stone-throwing protesters, as the nationwide stoppage entered the sixth day.

Riot police fired teargas at groups of rioting youths who burned tyres and smashed car windows, press reports quoted police and witnesses as saying.

"Groups of vandals are burning tyres and smashing car windows. They’ve even tried to break into a police station to recover arms. We’ve been obliged to intervene and we’re controlling the situation at the moment," a senior Guinean police officer was quoted by Reuters as saying.

Union and opposition leaders told Reuters that unless a solution was found they would halt the important bauxite production on Thursday in the world's biggest single exporter of the ore from which aluminium is extracted.

Mineral resources, chiefly bauxite and gold, represent 85 percent of Guinea’s exports, more than 25 percent of government revenues and 17 percent of the gross domestic product - all of which are under threat from a looming power vacuum.

President Conte, a reclusive diabetic in his 70s who seized power in a 1984 coup, is being accused of becoming increasingly erratic in his decisions and unfit to rule.

Last Friday, Conte met with the strike leaders and asked them to put their demands in writing.

Signalling their intention to target the strategic bauxite sector, union representatives on Monday entered administrative offices of the national Compagnie Des Bauxites de Guinée (CBG) and ordered employees to stop work, Reuters reported.

"The union members came and called on everyone in the offices to leave ... They said if there’s no agreement between the state and the unions, the whole chain of production will be halted from Thursday onwards," a senior CBG official was quoted by Reuters as saying.

The agency however said despite the administrative disruption, minimum industrial operations were being maintained at the mining centres of Kamsar and Fria.

CBG is operated by US aluminium giant Alcoa World Alumina through its Halco venture with Canada’s Alcan and privately-owned Dadco. Halco owns 51 percent of CBG with Guinea’s government holding the remaining stake.

The company produces just over 14 million tons of wet bauxite a year from its mine in the northern region of Boke, and exports some 13 million tons a year of dry bauxite. Guinea holds an estimated 25 billion tonnes of bauxite resources, roughly a third of the world’s total.

Meanwhile, Alcan - the world's second-largest maker of primary aluminium - has said that worker safety and not bauxite output is its first concern in the nationwide stoppage in Guinea that threatens to disrupt the production of the ore it uses to make aluminium.

Officials from the company were quoted in press reports saying that a halt in bauxite output in Guinea would not likely have a major material impact on the company's global aluminium smelting operations.

"There could be some minor disruption in our supply chain, but I don't see that cascading down to be a major interruption in terms of smelters or anything of that nature," Dick Evans, president and chief executive of Alcan, was quoted by Reuters as telling reporters.

Evans said the Canadian company's first concern is the safety of about 3,000 workers employed through the joint venture in Guinea.

He said bauxite can be stored for later use in the aluminium production chain.

By Rodrick Mukumbira
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