Mining is the most important sector in the economy, providing approximately 20 percent of GDP, 90 percent of recorded exports, and 70 percent of government revenue, though world commodity price declines in the 1990s have hurt the industry. A new mining code has been an incentive to investors, and foreign companies are now responsible for 85 percent of new developments.
Guinea has 30 percent of the world’s known reserves of bauxite and is the world’s second largest producer of the ore. The biggest company in the sector is owned by the U.S. company, Alcoa, and produces 12.5 million tons per year, and through further investment this figure should rise to 13 million. A Soviet-backed company has had erratic production since the downfall of the Soviet system and produced only 1.5 million tons in 1998, though its capacity is 5 million tons per year. There is also a joint venture with Iran, though production has yet to start, as it is still waiting for improvements of the rail links with the capital to make the venture viable.
The parastatal Frigvia has the capacity to produce 700,000 tons per year of alumina (the processed form of bauxite), though heavy losses in the years 1991-96 and internal disputes have caused the French advisers to pull out. The privatization sale of Frigvia to a U.S. company is well advanced, and other nations have also shown interest in other smelting ventures elsewhere in the country.
Small-scale gold-mining takes place throughout the country, and several large ventures are planned or have recently come into production. Gold generates about 13 percent of export revenues according to the official figures, but the amount of small-scale mining and smuggling means that much gold production goes unrecorded, and the importance of gold to the economy is significantly greater than the statistics indicate.
The 1985 ban on small-scale diamond mining, which was designed to encourage large-scale foreign investors, was lifted in 1992, and small-scale operators are now responsible for the bulk of the national production of an estimated 80,000 to 125,000 carats per year. Official diamond exports are about US$40 million a year, but because only 15 percent of diamond mining goes through official channels, the real benefit to the economy is closer to US$250 million. The new mining code has sparked considerable international interest.
Guinea has 6 percent of the world’s iron-ore, though plans to exploit the deposits have been held back due to their location near Liberia during a period of regional tension. Other reserves include chrome, cobalt, copper, lead, zinc, manganese, molybdenum, nickel, platinum, titanium, uranium, chalk, graphite, and granite. Guinea almost certainly has undiscovered deposits of commercial minerals as only one-third of the country has been surveyed.
Guinea MANUFACTURING.
Formal manufacturing is small and has fallen from 4.3 percent of the GDP in 1993 to 3.9 percent of the GDP in 2000. The majority of production is in the agro-industry sector, although manufacturing in Guinea also includes brewing, soft drinks, cement, and metal manufacture. The cigarette producer, Entag, closed following a fire in 1999, and most state-run enterprises have closed, and no major enterprise opened in the 1990s. Most manufacturing is concentrated around the capital.
Publicly-funded construction accounts for one-half of total construction, and most of it was concentrated on improving the infrastructure. However, recently the private sector has become more active.
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Guinea Mining Industry and Guinea MANUFACTURING
Guinea mining Industry
Mining is the most important sector in the economy, providing approximately 20 percent of GDP, 90 percent of recorded exports, and 70 percent of government revenue, though world commodity price declines in the 1990s have hurt the industry. A new mining code has been an incentive to investors, and foreign companies are now responsible for 85 percent of new developments.
Guinea has 30 percent of the world’s known reserves of bauxite and is the world’s second largest producer of the ore. The biggest company in the sector is owned by the U.S. company, Alcoa, and produces 12.5 million tons per year, and through further investment this figure should rise to 13 million. A Soviet-backed company has had erratic production since the downfall of the Soviet system and produced only 1.5 million tons in 1998, though its capacity is 5 million tons per year. There is also a joint venture with Iran, though production has yet to start, as it is still waiting for improvements of the rail links with the capital to make the venture viable.
The parastatal Frigvia has the capacity to produce 700,000 tons per year of alumina (the processed form of bauxite), though heavy losses in the years 1991-96 and internal disputes have caused the French advisers to pull out. The privatization sale of Frigvia to a U.S. company is well advanced, and other nations have also shown interest in other smelting ventures elsewhere in the country.
Small-scale gold-mining takes place throughout the country, and several large ventures are planned or have recently come into production. Gold generates about 13 percent of export revenues according to the official figures, but the amount of small-scale mining and smuggling means that much gold production goes unrecorded, and the importance of gold to the economy is significantly greater than the statistics indicate.
The 1985 ban on small-scale diamond mining, which was designed to encourage large-scale foreign investors, was lifted in 1992, and small-scale operators are now responsible for the bulk of the national production of an estimated 80,000 to 125,000 carats per year. Official diamond exports are about US$40 million a year, but because only 15 percent of diamond mining goes through official channels, the real benefit to the economy is closer to US$250 million. The new mining code has sparked considerable international interest.
Guinea has 6 percent of the world’s iron-ore, though plans to exploit the deposits have been held back due to their location near Liberia during a period of regional tension. Other reserves include chrome, cobalt, copper, lead, zinc, manganese, molybdenum, nickel, platinum, titanium, uranium, chalk, graphite, and granite. Guinea almost certainly has undiscovered deposits of commercial minerals as only one-third of the country has been surveyed.
Guinea MANUFACTURING.
Formal manufacturing is small and has fallen from 4.3 percent of the GDP in 1993 to 3.9 percent of the GDP in 2000. The majority of production is in the agro-industry sector, although manufacturing in Guinea also includes brewing, soft drinks, cement, and metal manufacture. The cigarette producer, Entag, closed following a fire in 1999, and most state-run enterprises have closed, and no major enterprise opened in the 1990s. Most manufacturing is concentrated around the capital.
Publicly-funded construction accounts for one-half of total construction, and most of it was concentrated on improving the infrastructure. However, recently the private sector has become more active.