Aluminium
Feature Articles
The Turbulent Atlantic
April 2021
Bauxites from Guinea and Brazil have a global reputation for their high quality and relative ease of processing. According to the USGS, Africa and the South America/Caribbean region comprise 53% of the global bauxite reserves. Guinea alone accounts for a quarter of the world’s reserves and has seen a dramatic increase in production in the past five years, making it the second largest producer behind Australia, and is expected to soon pass 100Mtpa. While the West African producers currently have very limited domestic refinery capacity compared with the South American/Caribbean region—with Rusal’s 640ktpa Fria refinery in Guinea the only operation—future refinery development is a potentially large value driver in the medium term.

A Common Ancestry

The breakup of the supercontinent Pangaea to Gondwanaland followed by continental separation creates the historical linkage between the bauxite regions of Brazil (and the Atlantic Coast of South America) in the West, and Guinea (and rest of West Africa) in the East. The two were contiguous up until around 50 million years ago, until the end of the Mesozoic Era, with the subsequent shift apart as continents spread.

 

 

Bauxite formation in these areas occurred over subsequent geological time intervals with peak formation of these deposits in both countries widely discussed but thought to be in the more recent time of the Quaternary period encompassing the last few million years.

At this time the climate was under tropical conditions, with host rocks leached during a wet season and subject to strong evaporation during dry season. These are contemporaneous with, or younger than, deposits formed in Australia, and much younger than the karstic hard rock deposits found in Europe and China (>50mya).

 

The Appeal of Atlantic Bauxites?

The Atlantic bauxites from West Africa and South America are generally known for their high recoveries of alumina, low processing temperature requirement and low consumable usage during refining.

In West Africa, Guinea dominates in reserves, mines, production, and potential future projects, although activities of exploration and potential development are occurring in a number of other countries in the region, particularly Ghana.

Production development in the West African region is predominately for export to China. Guinea has been known for its gibbsitic bauxites which contain both high levels of available alumina, and low to very low levels of reactive silica. These characteristics lend themselves to good recoveries at low processing cost.

 

 

In South America (excluding the Caribbean) the situation is similar, with one country, Brazil, dominating the bauxite production. In Brazil, the benchmark bauxite has traditionally been supplied from the MRN mine (Mineracao Rio do Norte). Again, high available alumina content in a gibbsitic bauxite with low silica values makes it a premium product on the global market, though unlike the Guinea bauxite, beneficiation by washing fine clays is required at most operations.

 

 

The Upstream Industry—West Africa vs. South America

Until recently, involvement in large-scale mines within Brazil and Guinea have been limited to major producers, with Rio Tinto, Alcoa, UC Rusal and Norsk Hydro featuring prominently.

Difficulties from significant hurdles on both sides of the Atlantic have been present in the form of political risk, significant infrastructural issues, and internal geography restricting ease of bauxite mining development. The large Los Pijiguaos mine in Venezuela ceased operation in around 2017 with the collapse of the broader aluminium industry in the country due to long-term political unrest and already in 2020, Rusal announced it was shutting down operations at its mines in Guyana due to unrest in the country. The Kurubuka-22 mine had only started operations in 2015.

Recent improvement in the political situation in Guinea has seen explosive growth in new projects and the country is currently the global epicentre for bauxite developments with a number of large-scale mines and many mid-tier and smaller projects progressing and expected to reach production in both the short and medium term.

 

 

 

A major differentiator between South America and West Africa is the depth of upstream development. The South American countries of Venezuela, Brazil, and Suriname all built downstream alumina refining capacity in conjunction with their bauxite mine development, looking to value add to the natural resources.

Despite difficulties and curtailments in Suriname and Venezuela, South America refined a total of 11.7Mt of alumina from domestic ores in 2020, with Brazil contributing nearly 9Mt of the total. This represents around ~65% of domestically mined ore being processed internally. West Africa by contrast only has a single refinery – the small 0.6Mtpa Fria refinery in Guinea which has only recently returned to production after being curtailed in 2012 – and exports the vast majority of its bauxite production.

More recent mine approvals granted in Guinea have required investigation of the development of domestic refining capacity. A significant increase in alumina refining capacity located in the West African region is expected in the medium term, with projects flagged in Ghana and Cameroon as well as more advanced developments in Guinea.