Announcement of Nine Million US Dollars Loan to Guinea for Extension of Mining Infrastructure on June 24, 1971

INTERNATIONAL BANK FOR • RECONSTRUCTION AND DEVELOPMENT 1818 H STREET, N.W., WASHINGTON 0. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 71/55 Subject: $9.0 million loan to Guinea for June 24, 1971 extension of mining infra- structure The World Bank will assi~t the expansion of a major bauxite mining venture in Guinea by lending $9.0 million for construction of supporting infrastructure, it was announced today. The Bank helped finance the initial project in 1968 with a $64.5 mil- lion loan for infrstructure. The balance of the $83~5 million infrastructure financing was supplied by the U.S. Agency for International Development (USAID). The infrastructure provided complementary facilities fo:,,; .__. . • estimated $99.0 million mining operation to extract bauxite near Bake in northeast Guinea, one of the largest known high-grade bauxite deposits in the world. The mining operation is being carried out by Compagnie des Bauxites de Guinee (CBG), owned 49% by Guinea and 51% by Halco Inc., (of the United States). Halco's shareholders are major Canadian, French, German, Italian, and United States aluminum companies. Although work on the mine site is only partially completed, the sponsors have decided to increase production capacity from 6.6 million tons of bauxite a year to 9.2 million tons. They will provide the estimated $23 million additional financing needed by CBG to expand produ; don. Approximately $12. 9 million in additional infrastructure is required to • support the expanded output~ The Bank loan will cover the estimated foreign exchange component with the balance being met from uncommitted funds from the original USAID loan. /more  Bank P.R. No. 71/55 - mining ~nfrastructure - Guinea - 2 - The additional infrastructure works required include a waiting basin in the Port of Kamsar and further dredging, lengthening railway passing loopa, • heavier rails, and extensions of the port townsite and hospital. ~~ a result of the project expansion, net income to the Government of Guinea from bauxite sales will more than double and reach nearly half a billion dollars over a 20-year period. The Bank loan for the extension project is for 21 years, including a two-year grace period, at 7~%. The semi-autonomous Government Agency, Office d'Amenagement de Boke, will implement the infrastructure project. Procurement will be through variation orders to contracts for the first project. Completion of the expanded mining and infrastructure p=ojects is scheduled for mid-1973. • - 0 - • ...