The Republic of Guinea
from Rags to Riches

Mr. Brian W. STeane, General Manager

Interview with

Mr. Brian W. Steane,
General Manager

June 28th, 2000
Could you give us a brief overview of CBG and its future prospects?

CBG first started construction in 1969 with the first shipment of bauxite in 1973. The ownership of the company is split in two parts: 49% is owned by the Government of the Republic of Guinea and 51% owned by Halco (Mining) Inc. of Pittsburgh, USA.

Halco in turn is made up of six international aluminum companies of which Alcoa and Alcan are the largest shareholders. CBG has a resource of 465m tonnes at 52% total alumina in its prinmary lease and there exisits a further 3 billion tonnes at 50% total alumina in the Boke region. When mining first started at the Sangaredi deposit the grade was plus 60% making it the richest deposit in the world.

The project has three main parts: the mining operations at Sangaredi, which are 140km inland, 140km of railroad connecting the mines to the port, and the port facilities which include crushing, stacking, drying and shipping of the bauxite.

In June 1999 an important milestone to be noted was the signing of a new protocol agreement between the Guinean government and Halco. This agreement named Alcoa of Pittsburgh as the lead or managing partner and changed the management structure of the company, removing the involvement of the Guinean government in the daily management of the company.

Could you give us some important figures?

The plant was built to export nine million tons of bauxite per year, which has been steadily increasing over the past few years. Last year (1999) 12.1 million tonnes of bauxite were exported, and the planned production for 2000 is 12.5 million tonnes. We are now investing money in plant and equipment to increase its production level to 13 million tonnes.

Can you tell us a little bit more about your on-sight investments?

The investment budget over the past few years has been approximately $30 million USD/year, which includes the upgrading of existing plant and equipment.

The current asset value is approximately 300 million USD with the plant and equipment having a total value of 220 million USD.

Employment level is approximately 3,000, of which 450 are temporary and contract employees. The expatriate numbers are 72, which include engineers, doctors, information systems experts, teachers ,financial professionals etc. This number has greatly reduced over the years as more and more senior Guinean professionals have been promoted into management positions.

At the start of the project there was no infrastructure. CBG had to build schools, hospitals, houses, roads, towns, provide electricity and water, as well as build the railroad, mine and port facility. The two towns that were built were Sangaredi and Kamsar around which the population has steadily grown to 39,000 and 80,000 respectively. This population is putting an additional social burden on CBG to provide water, electricity and other needs.

Could you mention any new activities CBG is thinking of getting involved in?

There is a study going on and the government is actively encouraging the construction of an alumina plant in the Sangaredi area. There are billions of tonnes of bauxite in the area, so someone at some point is going to invest in an alumina plant. CBG has the ore reserves and the mining infrastructure and is able to supply bauxite to an alumina plant if one was to be constructed. The existing infrastructure at the Kamsar port could also be expanded to enable the export of the alumina. Further refining of alumina to aluminum requires a large quantity of low cost energy and will probably not be economic in this region.
What is the major challenge for CBG?

The major challenge for CBG is that a significant part of our work force is reaching retirement age. Over the next ten years there will be 1000 employees who will have retired. We are therefore working with local schools and colleges to upgrade their facilities and standards. We are providing teachers to assist with the upgrading of the education standards, the local teachers skills and the education facilities so that new employees will be able to learn and work with the latest industrial technology. We also have a training program where we send employees overseas to Alcoa facilities in Western Australia. They are integrated into the system there and work first hand with the latest technology and management systems.

What is your relation with the Guinean government?

We have a direct reporting relationship with the Ministry of Mines Geology and Environment. With the change in the management structure and the elimination of the government appointed assistant general manager, there is a need to maintain close contact with the ministry.

What can you say about the future of the mining sector in Guinea?

Guinea has recently revised its mining code to attract international mining investors. This is starting to have some success as there are several new exploration projects underway. Guinea also has a Chamber of Mines, which has been supported by the Minister of Mines in its formation. These associations are very common and successful in English speaking countries but are not common in countries of French origin. The chamber's role is to assist and aide the mining industry.

The government is also encouraging the development of the private business sector. CBG had to build all of the infrastructure during the early development but with this new direction by the government it will now be active in privatizing it's non core activities. These activities include light vehicle and heavy equipment maintenance, food supply, the generation and distribution of electricity, the supply and distribution of water to name a few. Our main goal is to attract small private investors, and we have a team now actively looking into divesting these businesses.

Could you give us some personal background information?

I have worked in the mining industry all my life, starting as a mechanical engineer. I have worked in Canada, built a gold mine in Mali, worked in Australia and now I am here in Guinea. I have held various positions in the mining business and have worked with copper, gold, iron ore, and now bauxite.

What is your final message to our readers?

We as a business will be actively changing the management of CBG so it will become more efficient and cost effective. To achieve this many of our non core activities will be privatized. One of the major challenges in the near future will be the replacement of our power house. We will be actively encouraging a private investor to construct a new power house or hydro electric dam to provide approximately 40 megawatts of energy to CBG as a principal customer as well as supply the growing population in the region.

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© World INvestment NEws, 2000.
This is the electronic edition of the special country report on Guinea published in Far Eastern Economic Review (Dow Jones Group)
September 28th 2000 Issue.

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