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UPDATE 2-Rusal halts Guinea production after export block

Saturday, Sep 05, 2009
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* Alumina production stopped after ship detained in port * Latest in string of disputes between gov't and miners (Adds background) By Saliou Samb CONAKRY, Sept 4 (Reuters) - Russian metals firm Rusal has stopped production at its Friguia alumina plant in Guinea, the world's biggest exporter of aluminium raw material bauxite, a company source in the West African country said on Friday. The company halted output on Thursday at Guinea's biggest industrial project after a ship carrying the industrial mineral for export was prevented from leaving the port of Conakry, the source said. "Since yesterday, we have been banned from exporting our production for nonpayment of an environmental tax," the source said, speaking on condition of anonymity. "It's the ministry of the environment which has taken this decision," he said. Friguia is a major employer in the poor country which produces around 52,000 tonnes of alumina per month. Output returned to normal in August after it was slashed in July in response to falling demand for the substance, which is further treated to make aluminium. "I have been informed of the decision (to halt production)," Mines Minister Mahmoud Thiam told Reuters, without giving further details. Relations between the mining firms which operate there and Guinea's military junta have often been strained. Months after taking power in December 2008, Captain Moussa Dadis Camara's government said it was investigating the conditions of the sale of the Friguia refinery to Rusal. Rio Tinto (RIO.L), which has spent millions of dollars developing what could be one of the world's biggest iron ore projects, has disputed the government's decision to award a section of its concession to another firm. Officials at Rusal's headquarters in Moscow were not immediately available for comment. (Additional reporting by Carole Vaporean in New York; Writing by Daniel Magnowski in Dakar; Editing by Christian Wiessner)

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