Mining-infrastructure synergies, Growth corridors

In the pursuit of projects that are mutually beneficial for businesses and Guinea’s people, the government is strongly focusing on the link between mining operations and the infrastructure necessary for their success. Guinea seeks to create a number of “Growth corridors” around transport routes in order to unlock the growth potential of the Guinean economy, both locally and nationally. The importance of these projects is made clear by the World Bank’s estimate that transportation costs in remote areas can reach 77% of the value of exported goods.

 

Synergies between extractive industries and infrastructure

 

The Guinean government has been considering different ways to overcome the disadvantages faced by Guinean mining projects due to lack of infrastructure. It has devised two approaches to the problem:

  • Appeal to public-private partnerships to create the necessary infrastructure for mines;
  • Ensure the sharing of existing and future infrastructure to ensure it is used efficiently.

 

It is to this end that the Guinean State, with the support of the World Bank, conducted a study on the economic benefits of infrastructure sharing, and developed a Master Plan of Mining Infrastructure with 3 corridors (also known as “Growth corridors”):

  • The Northern Growth Corridor: With the Kamsar-Sangarédi railway and the port of Kamsar;
  • The Central Growth Corridor: With the old Conakry-Niger railway, the port of Conakry, the SBK railway and the Fria railway;
  • The Southern Growth Corridor: With the future Transguinean railway and the future deepwater port in the prefecture of Forécariah.

 

For the operation of mining projects in remote regions, infrastructure investment can be very important. A portion of the total financing needs for mining projects over the next decade, estimated at $50 billion, will be devoted to the opening up of production areas and the construction of deep water ports to export minerals.

 

 
 

The Southern Growth corridor

 

In addition to mining, the development of infrastructure will help stimulate growth across the rest of Guinea’s economy. As part of the Simandou South project, the future multi-purpose and multi-user “Transguinean” railway which will transport ore from the mines to the deepwater port (prefecture of Forécariah) will boost trade within the whole region and sectors of the traditional economy such as agriculture, horticulture, forestry and aquaculture.

The Simandou South project and its direct and indirect benefits – including job creation, outsourcing and supply – have the potential to double Guinea’s GDP.

Training being another lever to support the activities of local SMEs, a program of assistance to local entrepreneurs has been set up with the assistance of the International Finance Corporation (IFC, World Bank group).

 

Simandou will be one of the biggest projects in the world, resulting in significant associated infrastructure development, and there are several other potential world class projects in Guinea that we look forward to supporting – Tom Butler, Global Head of Mining, International Finance Corporation (IFC), at Mining Indaba, February 2014

 

 

Shared infrastructure

 

infrastructures-locomotivAn important agreement allowing the joint-use of infrastructure of the National Agency for Development of Mining Infrastructure (ANAIM) was signed on June 24, 2015 in Paris.

The infrastructure includes the Sangarédi Kamsar railway and the port of Kamsar in the Boké region. Their use will now be shared by the Guinea Bauxite Company (CBG), controlled by the government of Guinea and Halco (Rio Tinto Alcan, Alcoa and Dadco), the Dian Dian Bauxite Company (COBAD), controlled by Rusal, and Guinea Alumina Corporation SA (GAC), controlled by Emirates Global Aluminum (EGA).

 

The signed agreements are:

  • The multi-user contract on the railway and the designated rules for use of common rail in the Boké region. The co-signatories are the Guinean State, ANAIM, CBG (both dealer and user) GAC and COBAD;
  • The port operations contract between the Guinean State, ANAIM, GAC and CBG (as dealer), which deals with how GAC will use the port of Kamsar;
  • The port agreement between the Guinean State, ANAIM and GAC, which confirms and details the rights conferred on GAC at the Port of Kamsar, specifically the terms of design, financing, construction and exploitation of the new ore dock that GAC has to build in the port;
  • The infrastructure contract between the Guinean State, ANAIM and GAC, which details the rights and obligations of GAC regarding the access, use and extension of existing infrastructure.

 

It is, in terms of sharing, a first both in Guinea and in Africa – Boubacar Bocoum, Chief Expert of the Mines Department of the World Bank, on the June 2015 agreement on shared infrastructure