Guinea's UMS seeks alumina supplies for French specialty plant

London — Guinea, West Africa-based mining logistics company UMS is seeking to purchase alumina to feed the specialty alumina plant in France that it bought earlier in January, UMS chairman Fadi Wazni told S&P Global Platts.

The Marseilles-based Alteo plant, which will supply specialty alumina used as insulation in lithium-ion batteries and smart phones, will initially need to source around 400,000 mt/year of alumina to process into the specialty products.

In around three years, this requirement will increase to 500,000 mt/year as the plant expands and modernizes to reduce pollution, Wazni said in an interview.

"We may open bids for alumina as early as this week," he said. "The market for alumina is quite big so we are quite confident."

The alumina required may be sourced from Europe or the US, he added.

Alteo is expected to produce 240,000 mt/year of specialty alumina in its first years of operation under UMS' ownership, rising to 317,000 mt/year in a Eur30 million ($36.34 million) expansion, already financed, involving installation of a sixth oven.

The plant, previously in difficulties and with recognized red mud pollution problems, has continued to produce during this period and is currently supplying customers in the US, China, France and elsewhere in Europe, in the vehicle battery production sector and ceramics industries.

"We are experiencing strong demand. The market is in good shape now and we have to add capacity," Wazni said.

"There are very few competitors in this market. Total capacity worldwide for this type of alumina is around 2 million mt/year, with one plant in the US and two or three in Asia, including South Korea."

Previous owners of the Alteo plant, which is 130 years old, have included Pechiney, Rio Tinto and more recently US fund HIG.

Halting the Bayer process

A project to transform and depollute the Alteo plant will begin in early February, Alain Moscatello, Alteo chairman and UMS adviser, said during the interview.

The Alteo plant currently imports bauxite from Guinea for processing into specialty alumina. However, these imports and the Bayer alumina refining process used at the works -- considered pollutant -- will be phased out within the next 18 months. This will decrease the works' electro-intensity by up to 70%, Moscatello said.

The red mud, produced by the current refining process and stocked at the site containing contaminated water, will be decontaminated, and may be converted into products such as bricks, he said.

Cleaning up

Rio Tinto, in its role as a previous plant owner, has already committed funds to depollute the Alteo plant's waste area and UMS will contribute Eur40 million to the new industrial project, the company said.

Around 98 of the site's existing 479 employees will be redeployed in new roles at the works as a result of the revamp, Moscatello said.

Guinea-based UMS is a shareholder in SMB -- Guinea's largest bauxite producer. It is also a participant in the Winning Consortium Simandou which is on track to start production at a $15 billion iron ore project in part of Guinea's Simandou range in 2025, with an initial capacity of 60 million mt/year of high-grade iron ore, for which buyers are already waiting in the wings, Wazni said.

"As part of its integration process, SMB is also committed to build an alumina refinery in Guinea," he said.

Construction of the new refinery in Guinea may start this year and commence production in four-five years, Wazni said.