New delay for BHP on Guinea project

BHP Billiton is facing a second delay in its efforts to secure a one-third stake in an alumina refinery project in Guinea, West Africa.
  
In early November, BHP and joint venture partners Dubai Aluminium and Mubadala Development Company agreed to give Canada’s Global Alumina a $US100 million ($126 million) loan in return for exclusive negotiations to develop the refinery.
  
Under the agreement, BHP would own a one-third stake in the refinery and would manage the project on behalf of the venture partners. BHP has three exploration leases in Guinea but no bauxite mines.
  
The deal was to have been finalised by November 30, but just before the deadline a one-month extension was announced. At the time, Global Alumina had drawn down $US20 million of the loan and anticipated it would reach a formal agreement within one week. But Global Alumina late last week unveiled a second extension to January 12.
  
Global Alumina has now drawn down $US22 million of the loan.
  
Before the loan deal, the company had been facing a cash shortfall after Emirates International Investment Company pulled out of a $US50 million financing agreement.
  
The BHP-led joint venture’s right to exclusive negotiations is set to expire on March 31.