China's Chalco Plans $500 mln Investment in Guinea Bauxite Project

Aluminium Corp of China (Chalco) plans to invest $500 million in a project to produce bauxite, used to make aluminium, in Guinea starting next year, the mines ministry said.

The deal comes after a trip by the Guinean mines minister, Abdoulaye Magassouba, to China and follows other major Chinese investments in the resource-rich West African nation.

"The reserves of bauxite abandoned by BHP Billiton will eventually be exploited from 2018 by Chalco," said Saadou Nimaga, secretary general of the mines ministry. State-run Chinalco is the parent company of Chalco.

The project is in the Boffa area, about 200 km from the capital Conakry.

The $500 million will go towards the first of three project phases, which will also include aluminium production.

China, the world's largest iron ore consumer, has taken a growing interest in African mining opportunities.

In October, Rio Tinto agreed to sell its stake in Guinea's giant Simandou iron ore project to Chinalco, giving China the keys to one of the world's largest untapped iron ore reserves.