(Ecofin Agency) - Guinea, the world’s second-largest bauxite producer, faces a critical challenge as it seeks to process its bauxite locally. The government, led by Mamadi Doumbouya, must secure clean energy in large quantities to meet global demand for low-carbon aluminium.

Aluminium has become vital for key industries like renewable energy, electric vehicles, sustainable construction, and packaging. The International Renewable Energy Agency (IRENA) forecasts a 30% increase in aluminium demand by 2030. 

In a report issued in early April, IRENA discussed strategies for achieving carbon neutrality in the aluminium industry via renewable energy sources. The report highlighted that the aluminium sector is accountable for roughly 2% of worldwide greenhouse gas emissions. To meet climate goals, emissions must drop by 95% by 2050, achievable only if 90% of the electricity used in production comes from renewable sources.

Towards a selective market: the rise of low-carbon aluminium

According to the document, seen by the Ecofin Agency, several platforms such as Fastmarkets and S&P have launched indices tracking low-carbon aluminium in Europe. Historically traded on platforms like LME, SHFE, and NYMEX without environmental considerations, low-carbon aluminium now commands premiums for sustainability. Low-carbon is defined as having a carbon intensity below 4 tonnes of CO₂ per tonne produced (scope 1 and 2).

If major companies and investors start factoring carbon footprint into their decisions, it could yield a divide between "clean" producers and others, potentially offering competitive advantages to countries that combine local production with renewable energy. For nations exporting alumina or aluminium, competitiveness may no longer solely depend on processing capacity but also on the carbon footprint associated with production.

A Well-Advanced Guinean Strategy

Guinea has ramped up its strategy to climb the value chain in bauxite processing since 2022. Under President Mamadi Doumbouya’s leadership, mining companies have been compelled to submit plans for local processing. This push led to a $4 billion deal with Emirates Global Aluminium to build a 1.2 million-tonne-per-year alumina refinery. China’s SPIC has also begun constructing another refinery in Boffa with a similar capacity and a $1.03 billion investment.

These projects aim to boost the value of Guinea’s bauxite exports, which are expected to exceed 140 million tonnes by 2024. Alumina, which is processed from bauxite, currently sells for four to five times more than raw bauxite on the London Metal Exchange (LME). According to Roots Analysis, the alumina industry could be valued at $66 billion by 2035.

Staying Ahead with Green Electrification

According to an Atlantic Council report cited by the Ecofin Agency, transforming bauxite into alumina and aluminium requires massive energy: refining one tonne of ore into aluminium consumes around 3,000 kWh, compared to just 34 kWh for extraction. 

Meanwhile, an AfDB report notes that Guinea has a very low electrification rate–44.1% nationwide and 19.3% in rural areas as of 2022. This limits both access to power and industrial potential.

To bridge the gap, Guinea has been investing heavily in renewable energy projects. The country is building hydroelectric power stations like Garafiri (75 MW), Kaléta (240 MW), Souapiti (450 MW), and Amaria (300 MW). In September 2024, Gigawatt Global announced plans for two photovoltaic plants with a combined capacity of 50 MW and a $90 million investment. Guinea also launched its first grid-connected solar project in 2021—the Khoumagueli plant—with a capacity of 40 MW.

Guinea will need more renewable energy projects to ensure competitive alumina production for low-carbon markets. Integrating carbon constraints into industrial plans could secure Guinea’s future exports while positioning it as a key player in the emerging green aluminium market.

This article was initially published in French by Louis-Nino Kansoun

Edited in English by Ola Schad Akinocho