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It is a mineral that is part of the composition of an everyday metal that is now worth gold. Bauxite is the basis of aluminium, the price of which is skyrocketing on the markets. Guinea is the first exporting country of this mineral in the world and it has just experienced major political changes.
Without this ore, no aluminium. It is essential to its manufacture and one of its sources almost dried up suddenly. It was the fear, in any case, of the markets which, with the coup d’état of September 5 in Guinea, imagined the worst: a break in the supply chain.
The country holds a quarter, or even, according to some sources, a third of the world’s bauxite reserves. It is the second largest producer in the world, just behind Australia. The fall of Alpha Condé and the advent of the ruling junta caused the price of aluminum to skyrocket. In the followingmath of the putsch, the price of metal had reached its highest level for 10 years. On the London Metals Exchange, a tonne traded at $2,950 on September 13, 2021. Shares of major Chinese, Russian and Australian producers gained between 2 and 14%.
If in 2020, Guinea exported 82.4 million tons of bauxite, the figures for the year 2021 should not be lower, according to a source within the Guinean mining industry. No official data yet, but production hasn’t wavered.
The worst-case scenario – the blockage of the supply chain – ultimately did not happen. The Guinean transition that has taken place since has not reshuffled the mining cards. The result has been a clear stability in bauxite prices since 2016, which can be bought between 28 and 32 dollars per ton. No increase or decrease in the purchase price, but this may change in the future.
The mining sector should experience intense development in the coming years, with the exploitation of new sites. Above all, Russian demand might be affected by European sanctions. The second largest aluminum producer in the world has gone to war once morest Ukraine. If the world production of this metal falls, bauxite needs and its price might see the same evolution.
