Iran looks beyond Guinea mine project to secure bauxite supply

MELBOURNE Nov 8 (Reuters) - Iran is looking beyond a long-held project in Guinea to secure bauxite supplies, including from Australia, as the country ramps up its aluminium production, a manager at a state-owned Iranian mining development company said.

"We need bauxite because we don't have enough in Iran. If we want to reach our goal, we should buy bauxite," said A. Asgharzadeh, an exploration manager at Iranian Mines & Mining Industries Development & Renovation Organization (IMIDRO), a state-owned holding company active in the mining sector.

Iran has been investing into investigating its own mineral reserves, but is unlikely to find sufficient bauxite to meet its goal of expanding aluminium capacity to 1.5 million tonnes by 2025, from around 450,000 tonnes currently, he said.

"If we want to reach this capacity, we need more than 4 million tonnes of bauxite per year," he told Reuters on the sidelines of the IMARC mining conference in Melbourne.

Bauxite is a mineral ore that is processed to make alumina and aluminium is then refined out of the alumina.

IMIDRO is already a majority investor in Guinea's Societe des Bauxites de Dabola-Tougue (SBDT), with 51 percent.

SBDT, which owns permits over 5,684 square kilometres, expects to begin construction on a mine by the end of this year to tap its bauxite reserves.

The project has remained largely dormant since the original agreement between Guinea and Iran was signed in 1992. However, the two nations renewed the 25-year agreement last year. Guinea holds the remaining 49 percent.

IMIDRO is now lending financial backing to the project, which is expected to cost around 505 million euros ($558 million).

"One strategy is to extract the bauxite from Guinea, and export it to Iran. Another way is to negotiate with different companies, for example in Australia, with a big mine in the north of Australia, Queensland, owned by Rio Tinto," he said.

"We want to negotiate to buy bauxite from this company or other companies."

Rio Tinto owns the Weipa bauxite mine on the western Cape York Peninsula in Queensland, Australia. The mine produces 26 million tonnes of bauxite a year.

Rio Tinto declined to comment.

"Another plan, we will try to find a new location for exploration and extraction of bauxite in other countries. And we'll continue our exploration in Iran, but Iran doesn't have good potential for bauxite."

For a fact box on Iran's mineral reserve production plans: ($1 = 0.9055 euros)

(Reporting by Melanie Burton and Sonali Paul; Editing by Christian Schmollinger)

source: Reuters Africa