Rio Tinto sells, China expands African bauxite holdingsPublished on October 13th, 2009 | By: email@example.com
According to TradingMarkets.com, Rio Tinto is selling its 80 percent stake in Ghana’s only bauxite mine to Chinese minerals group Bosai, the company said on Monday.
CTT has been reporting on alleged price gouging and monopolization of bauxite by Bosai. Price constraints on certain grades of bauxite have created difficult conditions, particularly for U.S. refractory ceramic makers who are also struggling with slowdowns in steel making and similar industries.
The Australian firm has shelved an earlier plan to develop an integrated alumina refinery which would have been fed by the Awaso mine, as a result of poor local infrastructure and lower global demand for minerals.
“Apart from the prevailing unfavorable market conditions, the infrastructure is not ready yet for that program … the cost of power and the supply system has to improve,” Rio spokesman Stefano Bertolli said.
The mine in the West African country produced 637,000 tons of the aluminum raw material, according to the firm’s website. But the company has also been selling some underperforming assets to cover recent losses.
The sale to Bosai, which produces alumina and aluminum in China, will be complete by the end of the year and is subject to approval by Ghana’s parliament, Bertolli said.
“After careful consideration of various options, accelerated by a period of very tough economic market conditions, we decided to pursue sale of our share in GBC,” he said, declining to identify the value of the sale.
By contrast to Awaso, Rio Tinto last year received 45 percent of output from the Sangaredi bauxite mine in nearby Guinea, amounting to almost 6 million tons.
Ghana’s main mineral export is gold, of which it is Africa’s second biggest producer.
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