BHP Billiton Ltd., Global Alumina Corp. and their partners will seek to raise $2 billion to fund the development of a new alumina refinery in Guinea and are considering developing a second refinery on the same site.
The joint venture intends to fund the project from a combination of bank loans and export credit guarantees, Global Alumina Chief Executive Officer Bruce Wrobel told reporters at a press conference in Dubai today.
``The bauxite concession we have includes sufficient bauxite, we believe, to support a second alumina refinery, which ultimately down the road will allow us to produce as much as 10 million tons of alumina,'' Wrobel said.
BHP, the world's biggest mining company, is building the Sangaredi project with Global Alumina and United Arab Emirates- based partners Mubadala Development Co. and Dubal Aluminium Co. Aluminum producers want to gain more control over the supply of raw materials to make them less vulnerable to price swings. Guinea has the world's largest bauxite reserves.
The Sangaredi project includes an alumina refinery with an annual capacity of 3 million metric tons and a bauxite mine. Bauxite is refined into alumina, which is then smelted to make aluminum.
The price of alumina has more than doubled in the past five years, as China, the world's largest aluminum producer, expanded metal production.
Persian Gulf states including Saudi Arabia, the U.A.E., Qatar and Oman are investing billions of dollars to build aluminum smelters in an effort to utilize abundant cheap gas and low-cost labor.
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