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Background | Project Objectives | Description

PROJECT STATUS: ACTIVE

PARTNER/CLIENT NAME: Guniea Aluminum Corporation(GAC), IFC, CommDev, FIAS(Foreign Investment Advisory Service), BHP Billiton

COUNTRY/REGION: Republic of Guinea, Africa

COMMUNITY DEVELOPMENT FOCUS: , Capacity Building, Sustainable Development, Local Economic Development and Supply Chains, Extractive Industries

MINING SECTOR: Aluminum

 

BACKGROUND 

 

Guinea has major deposits of bauxite, gold, diamonds and iron ore and the potential for production of alumina and smelting of aluminium. But despite this, Guinea remains one of the poorest countries in the world. According to the UN Human Development Report (2006) 40% of the population live below the income poverty line – ranking 160 out of 177 countries. 
 
Mining is the most important economic activity in Guinea. Until 1990 it accounted for more than 20% of GDP, was responsible for over 90% of recorded exports and provided 65% of tax revenues. New investment agreements signed recently are likely to involve over ten billion of dollars and ensure the sector’s position as the main source of foreign direct investment. To maximize the opportunity that this presents for economic development, it is important that a comprehensive linkage program be developed and incorporated with IFC’s investments. 
 

The Program is building on IFC’s experience with: BHPBilliton in Mozambique, ExxonMobil in Chad and other extractive industry projects. This Program supports GAC’s commitment to implement socially and environmentally responsible business practices and improve the economic situation of local communities through the Project and beyond. BHPBilliton is well known to IFC through its investment in Escondida in Chile besides the Mozal investment in Mozambique. The Linkage Program in Guinea will be carried out ion a national level and discussions are underway with Rio Tinto to complement our equity investment in their Simandou iron ore project. Due to the cluster approach of using several corporate partners, this Program will eventually be comprehensive enough to have national impact, similar to the Linkages Programs in Chad and Azerbaijan.

 

 PROJECT OBJECTIVES

The primary objective of the GAC (Guinea Alumina Corporation) Linkages Program is

  • to contribute to positive and sustainable socio-economic growth and enhance the development impact of GAC’s Guinean Sangaradi project, a US $5.2 billion aluminum refining and mining operation, through local supplier development. 

This will be a comprehensive national program geared towards building the capacity of Guinean SMEs so that they can supply to the growing mining sector.

 

DESCRIPTION 

 

The four components of the GAC Linkages Program are:

 

(I) Access to Information:   

To promote transparency, the Program will publicize the bidding opportunities with GAC. Information sessions providing an opportunity for SMEs to learn GAC’s rules and procedures for bidding will be conducted by the Program. 

(II) Business Development Services: 

SMEs will be evaluated. Those that are rated a pre-determined level will be eligible for training on bidding procedures. Companies that have been awarded a bid will receive classroom training and one-on-one mentoring for business, technical, maintenance, quality. IFC’s business linkages programs will be a partnership between GAC, a local implementation partner/business development service provider and IFC. 

(III) Access to Finance:  

Leveraging IFC’s contacts and knowledge of local financial institutions, the Program will work with suppliers in need of working capital to develop business plans and approach banks for financing with the expectation that, over time, financing will be readily available to SMEs by banks. A joint venture has been established to bring IFC’s financing expertise to develop financing with local Guinean banks that will support local businesses linked to the mining industry.  

(IV) Business Enabling Environment

Working with FIAS(Foreign Investment Advisory Serviec, IFC), the Guinea Linkages Program will also include a team to analyze the regulatory framework and ease of business for MSMEs. Collaboration has begun with FIAS on this.   
 

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