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Homeworld politicsGuinea coup rattles iron ore and bauxite markets, stokes economic uncertainty

Guinea coup rattles iron ore and bauxite markets, stokes economic uncertainty

  • The coup, carried out by an elite special forces unit led by 41-year-old Col. Mamady Doumbouya, is the latest in a series of power grabs in the region over the past year.
  • Guinea's 110-kilometer Simandou range hosts one of the largest untapped iron ore deposits in the world.
  • Guinea has the world's largest reserves of bauxite, the globe's main source of aluminum. Prices of aluminum spiked to a 10-year high Monday on the London Metal Exchange.

CONAKRY, Guinea – Lieutenant Colonel Mamady Doumbouya, head of the army's special forces and coup leader, waves to the crowd as he arrives at the Palace of the People in Conakry on September 6, 2021, ahead of a meeting with the Ministers of the Ex-President of Guinea, Alpha Conde.CELLOU BINANI/AFP via Getty Images

A military junta claimed to have seized control in the West African country of Guinea and detained President Alpha Conde, casting uncertainty over key bauxite and iron ore supplies.

The coup, carried out on Sunday by an elite special forces unit led by 41-year-old Col. Mamady Doumbouya, is the latest in a series of power grabs in the region over the past year, including in nearby Mali and Chad.

Doumbouya has claimed the army was forced into action amid rampant corruption, human rights abuses and economic mismanagement under Conde, but the move has been condemned by the U.N., the African Union and regional body ECOWAS.

The elite unit on Monday allowed travel to resume through checkpoints in the capital of Conakry, barred government officials from foreign travel and lifted a curfew in mining areas

What's more, it has imperiled minerals and mining endeavors which are crucial to the country's economy and global supply chains, according to experts.

Iron ore

Guinea's 110-kilometer Simandou range hosts one of the largest untapped iron ore deposits in the world, containing more than 8.6 billion tons of ore with an average 65% iron content, according to the country's National Institute of Statistics.

Simandou is situated in the remote southeastern interior of the country, a vast distance from Conakry and the western coastline that must be reached to access the global seaborne market for iron ore.

"The infrastructure demands of the project are consequently massive in scale, complexity and cost, larger on all measures than the bauxite export industry that has been established in the country in recent years," said Andrew Gadd, senior steel analyst at CRU Group.

"Geopolitical risk has been one of many hurdles hindering progress of Simandou up until now and the military coup that is now unfolding in the country marks a significant deterioration in the prospects for successful development of the deposit."

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