Guinea bauxite income seen down 60 pct in 2010

CONAKRY, Sept 28 (Reuters) - Government revenues from Guinea's CBG, the world's biggest bauxite exporter, will fall some 60 percent in 2010 due to lower prices and export volumes, officials said, warning instability was likley as a consequence. CBG exported a record 13.7 million tonnes of bauxite in 2008, accounting for 80 percent of government mining income in the mining-dependent nation. However, a military junta in power since late-2008 is facing increasing hostility against the prospect of its leader standing in polls, now due in early 2010. "The revenues from Compagnie des Bauxites de Guinea will go from $101 million this year to $38 million in 2010. It is clear that we are going to have some problems," Ibrahima Soumah, a former mines minister, told local radio late on Sunday. Alcoa and Rio Tinto Alcan control the Halco joint venture that owns 51 percent of CBG, and the Guinean government holds the remainder. "The revenues are calculated from sales and the price of bauxite on the international market. These are the revenues that allow the state to buy rice and pay for some of the state's obligations. The situation could be very tense," he added. Soumah, who has written a book on Guinea's mining industry and is currently a World Bank consultant, was a mines minister under the late President Lansana Conte. Conte's death in December 2008 led to a coup by Captain Moussa Dadis Camara. Camara's junta was initially welcomed by a population weary of years of authoritarian rule under Conte but delayed elections and the possibility of Camara standing in polls has galvinised opposition and increased the prospects of unrest. A senior CBG official, who asked not to be named, confirmed Soumah's projections. "It's true. revenues will fall by 60 percent. Bauxite exports which reached 13.7 million tonnes last year will only be around 11.3 million tonnes," he said, blaming the global economic crisis for the fall. The military junta, which has vowed to clean up Guinea's mining sector, is involved in a series of disputes with foreign mining firms. (Reporting by Saliou Samb; Writing by David Lewis; Editing by Keiron Henderson)