Aluminum Corp. of China Ltd., or Chalco, and the government of Guinea agreed to a mining convention on June 8 that governs the development and state investment of the Boffa bauxite project in the country.
Chalco inked the mining convention through its Chalco Hong Kong Ltd. unit.
The mining convention, outlined in a June 10 release, grants Chalco an initial 15-year mining license that is potentially renewable for another 15 years. It sets out investment by the Guinean government in the project.
Chalco is to transfer a 15% stake in a subsidiary that holds rights to the project to the Guinean government. The agreement also gives Guinea the option to hold up to a 35% stake in the subsidiary, referred to as "mining company."
Boffa, a bauxite deposit, is expected to cost US$706 million to develop, Chalco said. The company recently approved a US$163.8 million investment in the project.
Chalco pegged the size of the Boffa deposit at 1.75 billion tons grading 39.1% alumina and 1.1% silicon dioxide. It described the tonnage as a "resource reserve."
