Lindian Resources Ltd (ASX:LIN) has in excess of one billion tonnes of bauxite resources in the Republic of Guinea - and is now in the process of bringing its assets into production.
Guinea is the world’s second-largest producer of bauxite - behind Australia - and the leading supplier of bauxite ore into China, which happens to be the world’s largest bauxite importer.
Bauxite is the most common ore of aluminium, which has applications in almost every technology that will be used in the global shift to cleaner, greener energy.
Lindian’s bauxite resources
So, the hype around Lindian Resources, which currently has a market capitalisation of less than A$20 million, is understandable - Asimwe Kabunga, chairman of Lindian, says the company could play a major role in the global aluminium supply chain for many years into the future.
“We are really excited, we think we have a huge opportunity here,” he says. “With more than one billion tonnes of bauxite, it is a very long-term proposition.
“All three of our projects have JORC resources, there is no more drilling to be done - unless we wish to increase the resources, but we believe we have plenty at the moment - and the next step is utilising and building infrastructure to get the bauxite out of where it is.”
Lindian's projects are all within the large northern bauxite corridor in Guinea, entitled Lelouma, Gaoual and Woula.
Lelouma is a tier-one, multi-generational bauxite deposit, with 900 million tonnes at 45% alumina and 2.1% silica in the measured, indicated and inferred categories.
Gaoual is a very high-grade unique conglomerate bauxite deposit, with 83.8 million tonnes of bauxite at 58.4% alumina and 2.8% silica after screening.
And Woula is a low capex, near-term production deposit with 19 million tonnes at 41.7% alumina and 3.2% silica.
The company’s near-term strategy is to utilise existing infrastructure to bring Woula and Gaoual into production and become cash generative; Kabunga says there is no shortage of interested parties lining up for a slice of Lindian’s pie.
Looking further ahead Lindian will develop its own infrastructure to link together its Guinean northern corridor portfolio.
Bauxite-rich land in Guinea.
Large aluminium opportunity
Kabunga tells Proactive that “Guinea is to bauxite what the Pilbara is to iron ore”.
“In 2020 Guinea totalled 83 million tonnes of bauxite exports, a 388% increase on 2014, and Guinea is now the largest exporter of bauxite to China,” he says.
“There has been a lot of investment in Guinea in the last 10 years, and Lindian will follow in the footsteps of Compagnie des Bauxites de Guinée (CBG), a partnership between Alcoa (NYSE:AA), Rio Tinto and the Guinea Government, which has been mining bauxite in Guinea for more than 50 years.
“Although Guinea has been through turmoil, it has never stopped mining bauxite for even a day, and we are very close to the original CBG deposit; we’re very unique in Guinea and indeed the world.”
Though aluminium is not one of the first metals to come to mind when talking about the green future, it is used in the vast majority of clean technology, from wind to solar panels, EVs to carbon capture and storage.
“Not many people understand the opportunity with bauxite,” Kabunga says. “There are not many juniors in the space.
“The main drivers of value within bauxite are the alumina and silica content; it takes five tonnes of bauxite to produce two tonnes of alumina and ultimately one tonne of aluminium.”
Next steps
Lindian will tap third party infrastructure to bring Gaoual and Woula into production; Gauoal is only 100 kilometres from the CBG railhead, while Woula is just 10 kilometres from an existing haul road connecting to the bauxite export terminal of Katougouma.
It already has an existing agreement with China Railway Seventh Group Co Ltd to determine an infrastructure solution and to accelerate development of Lindian’s projects.
Third parties are continuing test-work on Gaoual, with significant interest being expressed in
the project as offtake agreements being pursued with Guinean operators; the company is currently assessing 'truck and shovel' with a simple screening operation for the project.
But it is the future that is most exciting, with Lindian’s 75 per cent-owned subsidiary, Terminal Logistics and Holdings, working with the Guinean Government to investigate a possible joint development of the Dobali port and an infrastructure corridor in Guinea to facilitate bauxite shipments.
The proposed Dobali port represents the best location to construct a deepwater bauxite export terminal in Guinea and would operate as an alternative to the Rio Nunez estuary, which is highly congested and controlled by majors.
- Daniel Paproth