Bauxite Over The Breadline

Kamsar May 7, 2012

Guinea [known as French Guinea] West Africa is the home of some 25% of all of the worlds exploitable Bauxite reserve. However the People of Guinea are some of the poorest in Africa; a lack of available energy means their Bauxite is sold for others to manufacture Aluminium.

With the advent of  low cost renewable energy Guinea is now destined to become one of the richest countries in Africa and because of its mineral wealth.

Since 2012 Africa has changed; beyond parity, new low cost renewable energy solutions with short lead in times now change world demographics. “Its changed Africa and the way in which Africans now feel about Africa” Says SOLIDEA’s Roland Montagnon. “Guinea produced bauxite we shipped it in railway cars and exported it on the breadline. Guinea had little enough electricity for its own domestic needs; turning bauxite into Aluminium requires a lot of electricity and without low cost renewable energy it could never of happened here”

Aluminium is in great demand globally, its a very wealthy industry used for all manner of manufacturing but the rate at which Guinea was exporting its high grade bauxite to smelters in foreign countries under the old regime “was at a snails pace” says Roland Montagnon. With world commodity prices for Aluminium at over 2,000 USD per ton Guinea’s received little more than 20 USD per ton for its bauxite the essential raw material from which Aluminium is made; “the bauxite might be extracted in Guinea but the value certainly got extracted elsewhere” says Roland.

SOLIDEA are now working with agencies and mining organizations to educate and fast track develop and deliver low cost energy utilities in Guinea. “Successful Renewable Energy Development  means Guinea can best exploit its own mineral wealth” says SOLIDEA’s Steve Walker. “Africa is blessed with a lot of minerals and natural renewable energy potential and there is a lot of resources here” says Walker. ” Delivering successful solutions locally in months rather than years is a real game changer for mining, minerals and industry”

Hydro, Solar and CHP together can provide all the energy solutions for West Africa. Its turning heads, a lot of firms are now planning smelters even industry in Africa, its good news for Africa because the value gets added in Africa and it stays in Africa. Finally its Africans who can benefit.

SOLIDEA will deploy a 1MW utility field and have a grid operational in just three months. With a turnkey installation cost of around 1,5m Euro per 1 MW the combined quality cost and time is a game changing combination. “There are several long term projects on the drawing board in the world which will now become obsolete because they can now be developed in Africa” says Walker “The game has changed renewable energy quickly pays for itself unlike black energy thereafter the energy production can be practically free”.

“The old system of transporting raw materials to black energy resources has had its day, suddenly everyone is thinking renewable, movable, progressive energy” says Walker.

West Africa has very good solar radiation between 2000 and 2700 hours per year.  Energy producing sunlight averages at 80% of the total available with most technologies this means 1600 and 2160 and an average of 1880 hours per year.

Even the most pessimistic outlook takes 1500 hours for the region this would mean SOLIDEA 1 MW utility produces 1,500,000,kWh per year. The extra ordinary consumption of electricity needed to produce one kilo of Aluminium nowadays is no more than 15kWh per kilo [and you can read that on most of the worlds biggest Aluminium producers websites] its means 1MW of solar can smelt 10,000 tons in one year.

In a recent report on renewable energy and Aluminium SOLIDEA were asked to include a real financial model and add on all the necessary soft costs. Having discussed the opportunities for corporate bonds SOLIDEA finally added 10% per year interest and a repayment term of 5 years to illustrate a real investment scenario. “Corporate Bonds are up to 3 times more expensive than some commercial bank instruments and more than 5 times the cost of some agency finance” says SOLIDEA’s Steve Walker. “But Corporate Bonds are available and will do  the job; the total cost for 1MW of utility grade energy would be 2,25m Euro”.

In concluding the renewable energy impact of 1MW 10,000 tons of aluminium per year are produced and it adds 225 Euro per ton to the cost or a little over 10% of the current world market rate for aluminium and between half and twenty five percent the impact currently reported by the major Aluminium Companies. “Most shocking is that this is a one off cost” says Walker “225 Euros means all the money is paid back in one year after the first year the energy is practically free this puts Africa ahead of the game”

“Solar cannot produce energy all the time so other forms of renewable energy such as CHP and Hydro readily boost the local energy mix in Guinea” says SOLIDEA’s Janusz Przeroek “Guinea was once world famous for producing Pineapples and Bananas and there is a lot of people would like to see Guinea back to work”. “Both industries are ripe for CHP” says Martin, “Both crops provide a high volume of by product and both are excellent CHP feed stocks, in any event we would welcome the opportunity to give solar a run for its money we think CHP can be even more competitive”.

The Renewable Energy Revolution provides a new era for Guinea the time for foreign Aluminium Companies exploiting Africa’s energy disposition is definitely over.











About Steve

Over 20 years in Real Estate and Energy Project Development
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