DUBAI Compagnie des Bauxites de Guinee (CBG) signed a long-term supply agreement with the United Arab Emirates for bauxite, the main raw material in aluminum, the Gulf country's state news agency reported.
The Emirates News Agency did not report the duration or value of the contract, which was concluded between CBG and the Emirates' investment fund Mubadala Development Co.
But Guinean Mines Minister Mohamed Lamine Fofana was quoted as saying at a signing ceremony in Abu Dhabi that the deal would add $500 million to Guinea's gross domestic product.
"The agreement with Mubadala will make a significant contribution to Guinea's economy by enabling the expansion of CBG to more than 20 million metric tons of bauxite per year," Fofana was quoted as saying by the news agency late on Friday.
Guinea's government said in a separate press release that Mubadala had said it needs 5 billion metric tons (5.51 billion tons) of bauxite by 2017.
The Guinean company CBG - a joint venture between the Guinean state and a consortium of companies including Halco Mining Inc, Alcoa, Rio Tinto, and Dadco - has an annual production of 13.5 million metric tons.
A CBG official in Conakry told Reuters it would take the company at least three or four years to raise production to 20 million metric tons per year.
"We can't do it right away," he said, asking not to be named. "We will definitely need to proceed with an expansion project first."
In March, Fofana said Guinea had started negotiations for Mubadala to take a stake in CBG. But Guinea said the supply deal did not result in Mubadala taking a stake.
Guinea is the world's largest exporter of bauxite. The UAE's Dubai Aluminum Co (Dubal) produces around 1 million metric tons a year of aluminum, according to Gulf business website zawya.com.
(Reporting by Angus McDowall; Additional reporting by Saliou Samb in Conakry; Editing by Rosalind Russell)