Question 1 : First
of all Mr. Renton, thank you for receiving us for
this interview. CBG is one of the most important
companies in Guinea; could you give us a historical
background of the company during these last years
?
Answer 1: CBG started its operations about
30 years ago. It was put together by a number of
large players on the international aluminium scene,
to provide and ensure a source of upgrade bauxite
to a number of alumina refineries around the Atlantic
basin. Basically, 51% is owned by foreign partners,
who are basically those large aluminium companies,
and 49% owned by the state of Guinea. The composition
of the 51% has changed several times over the years,
but currently the biggest player in that group is
ALCOA, whose share was augmented when they bought
Reynolds; secondly, Alcan and then Pechiney ; and
the other two partners are relatively minor partners
but they are Norsk Hydro and Comalco. Originally,
the production was about 7 millions tons per year,
however in response to increasing demand this has
increased to around 12,5 million tonnes per year.
The current capacity of the plant is of the order
of 12,7 millions tons per year. The highest tonnage
ever produced was in fact very close to 12,7 tons,
in the year 2000.
Q2: Could you specify a little bit more these
figures, that is to say the number of employees,
the amount of bauxite exported, the turn over
and the results of the company ?
A2: As I said, the capacity of the plant
is 12,7 millions tons of export quality bauxite.
That is all metal grade bauxite. The total revenue
of the company is currently of the order of 260
millions USD. The number of employees is about 2400
permanent employees, and we normally have up to
300 contractors or sub-contractors working for us.
The CBG is the biggest contributor of hard currency
income for Guinea.
Q3: What about the equipment you have ?
A3: Basically we have a fairly standard open
cast bauxite mine. We have a truck fleet of 15 haul
trucks of 85 tonnes capacity; we use mostly caterpillar
992C loaders for truck and rail wagon loading. We
have also the usual equipment of bulldozers, graders
etc for stripping, mine rehabilitation and mine
development and haul road maintenance
The mine is linked to the port by 140 km of rail
lines, with the associated structures. The port
facilities include crushers and a stockyard for
stockpiling the bauxite. The bauxite is dried
from moisture in the order of 12,4% down to less
than 6%. We have ship loading facilities to load
up to Panamax size bauxite vessels. We normally
carry an inventory of around 350 000 tons of raw
bauxite, and up to 120 000 tons of dried bauxite.
Q4: Last august, there was a meeting at the
Ministry of Mines where your contract was being
reviewed. Could you give us some results of this
meeting ?
A4: Part of the problem for these operations
is that the market for export of our bauxite to
our market is a mature market. It has been probably
24 years since an alumina refinery was built which
was not located on or very close to the bauxite
reserves. The customer refineries are among the
higher cost producers of alumina in the world. This
is partly because of the age of the refineries,
and their technology. It's also due to the fact
that the bauxite has to be shipped from the point
of origin to the consuming refineries. This of course
adds in to the cost a significant transport component.
Consequently, these refineries experience increasing
difficulties to compete with new refineries built
on the bauxite in places like in Australia. The
customers, who are also effectively the owners of
the enterprise, recently negotiated a price adjustment
with the Guinean government. This has a potential
impact on the revenues both to the partners and
to the Guinean government. The biggest challenge
for CBG in the immediate future is to engage in
a serious cost reduction program to offset those
reductions in revenue.
Q5: At the same time, the Guinean government
tries to create an aluminium industry. What is
the involvement of CBG in this project ?
A5: As I said, the market for exportable
bauxite to refineries around the Atlantic is basically
a mature market. One would anticipate, at this stage,
that even when the global economy improves that
there would be no substantial growth in our current
market for export bauxite.Probably, there would
be no opportunity for us to expand volume passed
our current capacity, expect, as a supplier, to
a local refinery in Guinea. Clearly, CBG would like
to be the supplier of bauxite to any local refinery.
This is basically the role of CBG. We are working
with companies who have an interest in constructing
alumina refineries in Guinea, to try to insure that
CBG is the supplier of the bauxite required to feed
this refinery..
Q6: Guinea is known as the geological scandal
of Africa. Have you planned to diversify your
production in the country ?
A6: Our majority partners are in the alumina
and aluminium business. So clearly, the priority
is to secure sources of supply for the existing
offshore refineries. In the longer term the magnitude
of the bauxite deposits in Guinea mean that eventually
alumina refineries will be built in Guinea. As I
stated above CBG would like to be the supplier of
any such refinery, whether that refinery be operated
by one of the CBG partners, or another entity. So,
given that CBG is not a general mining as in the
same way as for instance BHP-Billiton, our interest
is focused on bauxite. If we happen to expand a
part of the exploration program, to discover other
potential of exportable reserves of some other minerals,
then I believe that it would be something the partnership
would seriously consider.
Q7: As a foreign investor in Guinea, what
are your experiences concerning the relations
with the government and present infrastructure
?
A7: Well, I compare my experience in Guinea
with an another developing country in which I have
worked which is Indonesia. The government is always
willing to discuss the problems. The representatives
of the government make themselves available at the
highest level. The difficulties in dealing with
the government are mostly caused by a lack of cohesion,
by an apparent lack of cooperation between the various
government departments.. Arrangements can be made
and understandings reached with one government department
but that does not necessarily seem to filter through
to other departments. Clearly, we deal generally
with the Department of Mines. Whenever decisions
are made, which require implementation by other
government departments, that coordination between
various government departments could be improved.
|
In terms of infrastructures,
it is relatively difficult to do business because
of a lack of mining infrastructures one might have
access to another part of the world, and I think
there are potential opportunities there for companies
in a developing mining sector. For example, recently
CBG negotiated a "drill and blast" contract,
and the range of companies available with whom we
could negotiate that contract was somewhat limited.
The opportunities for a viable contract mining business
in Guinea are also present. So while a lack of infrastructures
is a problem, there's also an opportunity for Guinean
and foreign investors. However such infrastructures
will only be provided as a result of a significant
demand. So, the development of new mining operations
in Guinea would be facilitated by the presence of
service sectors,. However, people will only be prepared
to embark on those businesses if there is a growth
opportunity in the basic mining sector. So those
two potential benefits go hand in hand. It really
has to be driven by new investment in the mining
industry itself before those support sectors would
be encouraged to come in Guinea. The Guinean government
should do all it can to facilitate both direct investment
for the exploitation of mineral resources, and facilitate
the establishment of support fuctions such as contract
miners and suppliers of other services and equipment
Q8: CBG is also playing an important role
in the social aspect, especially in the region
where you're located. Which are the specific actions
undertaken to improve the life quality of the
Guinean people ?
A8: Clearly the biggest impact we have socially
is on our own employees and their families. CBG
has been involved in the promotion of health care,
to some limited degrees in education services; and
in its direct area of impact, basically the port
of Kamsar and the mining tents of Sangaredi, in
some basic services such as rubbish collections,
cleaning of the towns, provision of some improvements
of roads and other structures. We also set aside
a significant sum of money each year for social
projects which are less clearly associated with
our area of operations. Those social projects are
identified and approved jointly by the company and
by the representatives of the communities with whom
we interact, on whom we impact. These are not limited
to our own towns of Kamsar and Sangarédi,
but extended to Boké, and also to other villages
which border the railway line. CBG is also in the
process of funding the reconstruction of the road
between Kamsar and Boké. Clearly, it is our
objective to try, in some significant way, to have
a positive impact on the communities with whom we
interact. To have CBG's presence be seen as something
of value to the people of the region.
Q9: What about the training of your employees?
Do you have a skilled labour force or do you have
a program to get them skilled?
A9: The availability of skilled workforce,
in my experience, is one of the key fact on the
development of a country. Increasingly, technology
is being used to increase the productivity of the
workforce. However, this technology is becoming
increasingly sophisticated and therefore, the level
of skills needed by that proportion of the workforce
which is going to operate or maintain that equipment
is probably the key requirement, or one of the key
requirements, for the enterprise. For example, the
technology of alumina refining has become very sophisticated
over the last 20 years. 20 years ago, a significant
proportion of the workforce in a alumina refinery
was involved in swinging sledge hammers to open
and close valves. That doesn't happen anymore. Those
swingers of sledge hammers have now become high
level technicians. So that if Guinea is going to
progress and develop, then the training of the workforce
is going to be a key issue. If you look at CBG,
it is clear that when the enterprise was started
some 30 years ago, there was a very large investment
in training. It would appear that this investment
has not been maintained, except very recently when
a large proportion of the workforce who were recruited
at the starting of the operations 30 years clearly
are near to retirement age. So that skill bank has
to be replaced, but the level of training required
is now significantly more complex and sophisticated
than what was required 20 years ago. CBG recognized
this issue some 4 years ago, and has been working
with the educational institutions at Boké
to create training courses which would prepare skilled
operators and skilled maintainers. As a spin off
from that, it is anticipated that the fact these
courses have been developed not as internal training
courses at CBG, but as courses installed in public
institutions, that this would hopefully make some
significant contribution to the development of Guinea.
Q10: As a last question, our readers are general
managers like yourself, and they would like to
know about your experience. Could you give us
a background on your professional career ?
A10: I'm a civil engineer by training. I
got into equipment maintenance quite early with
Rio Tinto in the Pilbara, in the North-West of Western
Australia. I joined ALCOA Australia in 1979 as a
mine manager of the Huntly mine site. I spent 17
years with ALCOA as a mining engineering manager;
but I returned to operations after about 12 years
in the engineering role. Then I spent arelatively
short time in Indonesia, working for a small gold
enterprise. Recently, before I came to Guinea I
was the project manager for the mining contractor
in the Super Pit at Kalgoorlie Western of Australia.
I've been in Guinea now for 3 ½ years; firstly
as operations manager, and then as general manager.
Q11: And what has been your greatest satisfaction
since you've been working here in Guinea ?
A11: My greatest satisfaction, by far, has
been being able, as a general manager, to play some
part in the development of Guinean nationals; and
to have these appointees in jobs which some people
thought would never be handled by Guineans, and
to have these Guineans operating very successfully
in those positions. I also have a significant satisfaction
from bringing more than 30 years of experience in
the Australian mining industry, both in terms of
technology and in terms of people management, and
finding that those skills are generally universal.
There are clearly significant cultural differences
between Australia and Guinea; however the things
that might motivate people to work are generally
the same in both cultures, and most importantly
it is being valued as an individual, having trust
and confidence placed in you, and knowing that you
have the support of your superiors and their confidence.
Q12: Would you have a final message for the
readers of Express Magazine ?
A12: I believe that Guinea is a very challenging
environment; but the people are looking for improving
their lot. I believe there are very great opportunities
for investors in this country; but the most important
investment and the prerequisite to successful financial
investing is investing in the human capital and
the development of that capital. |
Mr. Ronald
RENTON