Guinea Asks Rusal to Return Friguia Alumina Complex (Update3)

Sept. 10 (Bloomberg) -- Guinea sent United Co. Rusal a letter asking the world’s largest aluminium producer to return the Friguia bauxite and alumina complex to the government, Mines Minister Mahmoud Thiam said. “It was asked of Rusal to restore the Guinean government the factory,” Thiam said. The letter was sent by the Guinean Ministry of Justice, Thiam said yesterday in an interview in Conakry, the West African country’s capital. Guinean President Moussa Camara said in April that he asked the justice ministry to consider legal action over a 2006 transaction that gave control of Friguia to Rusal. Guinea, the world’s largest bauxite exporter, was paid a fraction of the amount Friguia was valued at by consulting firms, Camara said at the time. “We have not received any letters from the Guinean government,” Rusal said in an e-mailed response to questions. “Friguia was bought by us in full compliance with Guinean legislation and we consider the plant to be our legitimate property.” Camara took power on Dec. 23 after a coup following the death of Lansana Conte, who ruled for 24 years. Conte’s government concluded the agreement with Rusal and Camara’s administration has said mining deals made with the previous regime will be probed. 2006 Accord Rusal said in April 2006 that Guinea had agreed to let it acquire full control of Friguia. Rusal, which up to that point had operated the mine through a concession, bought 100 percent of Friguia from the state and also acquired the 15 percent it didn’t already own in Alumina Co. of Guinea, which manages Friguia. Rusal didn’t give a purchase price. Camara said Rusal paid $19 million for the assets, while consultants had valued it at $257 million. Friguia has the capacity to produce 640,000 metric tons of alumina and 1.9 million tons of bauxite a year, according to Rusal’s Web site. Bauxite is an ore used to make alumina, which in turn is used in the manufacture of aluminium. Earlier today Papa Koly Kourouma, Guinea’s minister for the environment, said that the government and Rusal had on Sept. 9 signed an agreement to allow the company to restart Friguia after it was ordered to halt last week. Rusal agreed to pay 2 billion Guinean francs ($399,000) in environmental taxes, Kourouma said. The government also said yesterday that the operations of Rusal, AngloGold Ashanti Ltd. and Crew Gold Corp. in the country will be audited. ‘Prosperous Guinea’ Nobody should see the audits as “a witch hunt,” Ousmane Kaba, the head of a government audit committee and a former finance minister, said in a televised press conference. It is about understanding who made what decision “in such and such a period,” he said. “If we do not try to know how our country was managed yesterday, we cannot claim to bequeath to our children a prosperous Guinea.” AngloGold is working with the government, Alan Fine, a spokesman for the Johannesburg-based company, said in a telephone interview today. Bill LeClair, chief executive officer of Crew, said he wasn’t aware of the comments and therefore couldn’t comment.