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DUBAI (Reuters) - Compagnie des Bauxites de Guinee (CBG) signed a long-term supply agreement with the United Arab Emirates for bauxite, the main raw material in aluminium, the Gulf country's state news agency reported.
The Emirates News Agency did not report the duration or value of the contract, which was concluded between CBG and the Emirates' investment fund Mubadala Development Co.
But Guinean Mines Minister Mohamed Lamine Fofana was quoted as saying at a signing ceremony in Abu Dhabi that the deal would add $500 million to Guinea's gross domestic product.
"The agreement with Mubadala will make a significant contribution to Guinea's economy by enabling the expansion of CBG to more than 20 million metric tonnes of bauxite per year," Fofana was quoted as saying by the news agency late on Friday.
Mubadala Development's demand for bauxite is expected to reach 5 million tonnes per year by 2017, a Mubadala spokesperson told Reuters.
The Guinean company CBG - a joint venture between the Guinean state and a consortium of companies including Halco Mining Inc, Alcoa, Rio Tinto, and Dadco - has an annual production of 13.5 million tonnes.
A CBG official in Conakry told Reuters it would take the company at least three or four years to raise production to 20 million tonnes per year.
"We can't do it right away," he said, asking not to be named. "We will definitely need to proceed with an expansion project first."
In March, Fofana said Guinea had started negotiations for Mubadala to take a stake in CBG . But Guinea said the supply deal did not result in Mubadala taking a stake.
Guinea is the world's largest exporter of bauxite. The UAE's Dubai Aluminium Co (Dubal) produces around 1 million tonnes a year of aluminium, according to Gulf business website zawya.com.