GAC was established in 2001 when Global Alumina, then a Canadian publicly traded junior mining company, obtained Lease 149 from the Government of Guinea to build and operate an alumina refinery along with relevant infrastructure. In 2007, Global Alumina sold a majority interest in the project to BHP Billiton (33.33%), Mubadala (8.33%) and DUBAL (25%), and retained a 33.33% stake.
The project advanced well through completion of a Bankable Feasibility Study (“BFS”) along with approval of the Environment and Social Impact Assessment (“ESIA”). In parallel, the partners held advanced financing discussions with various interested lending parties. However, the global financial crisis of 2008/2009 impacted the ability and interest of some of the partners to fund their share of equity. Despite these difficulties the partners maintained a number of work commitments in addition to a number of social and environmental activities in the project area.
Following a strategy change within BHP Billiton and Global Alumina in 2013, Mubadala and DUBAL acquired the remaining shares in the project in May 2013, and transferred the ownership of GAC to the newly formed Emirates Global Aluminium (“EGA”). In November 2013, an amendment protocol was signed with the Government of Guinea relating to an investment in two phases. The amended GAC project scope was unanimously ratified by the National Assembly of Guinea at the end of June 2014 to permit phased implementation of the project, with bauxite mining for export purposes in Phase I and alumina refining in Phase II.
Approval of Second Amendment by Members of Parliament
The Basic Agreement is a comprehensive investment and concession agreement that grants GAC exclusive rights to build and operate the Mine, the GAC Alumina Refinery and the GAC Port Terminal. The Mining Concession granted under the Basic Agreement has an initial term of 25 years from signing in 2014, renewing automatically for a further 25-year term, and by further terms of 10 years thereafter on a conditional basis.
With the ratification by the National Assembly of the amendments to the Basic Agreement in June 2014, the legal, fiscal and regulatory regime assigned to GAC has been formally affirmed by the Guinean Government. The Basic Agreement includes guarantees from the Government of Guinea against expropriation or nationalisation, and flexibility with regards to hiring, selection of contractors and suppliers, importation of project materials, foreign exchange and currency management. The Basic Agreement, as amended, also affirms the ownership structure and scope of the project.