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Dodgy Deal
Société Minière de Boké Bauxite Mining ProjectGuinea

Project – Active

This profile is actively maintained
Profile by:
Association pour le développement rural et l’entraide mutuelle en Guinée (ADREMGUI), Center for Transnational Environmental Accountability (CTEA), Human Rights Watch, Mêmes Droits pour Tous (MDT) & Natural Justice
Contact:

Giulia Barbos, giulia@banktrack.org 

Last update: 2024-07-01 00:00:00
Photo: Promotional image from the SMB project website

Project – Active

This profile is actively maintained
Profile by:
Association pour le développement rural et l’entraide mutuelle en Guinée (ADREMGUI), Center for Transnational Environmental Accountability (CTEA), Human Rights Watch, Mêmes Droits pour Tous (MDT) & Natural Justice
Contact:

Giulia Barbos, giulia@banktrack.org 

Last update: 2024-07-01 00:00:00
Why this profile?

Why this profile?

The Société Minière de Boké (SMB) bauxite mining project in Guinea is associated with a wide range of adverse social and environmental impacts, such as the displacement of local communities, lost livelihoods, serious negative health impacts, environmental degradation, and the loss of crucial natural habitats for protected species in the area.

What must happen

Banks and other financial institutions providing finance to Winning International Group, United Mining Supply or China Hongqiao Group — the companies that own and operate the SMB mine — should exercise their leverage to ensure that the project’s social and environmental impacts are addressed to the satisfaction of local communities. More specifically, communities demand that project developers:

  • Comply with national regulations and international standards

  • Guarantee access to drinking water and rehabilitate watercourses and springheads 

  • Restore degraded lands and protect unaffected land. Ensure effective compensation and restoration of livelihoods for those who have lost their lands due to mining activities

  • Manage pollution, preserve the ecosystem and biodiversity

  • Protect and preserve the health and safety of the local population

A full list of community demands can be found here, on pages 51-53.

About
Sectors Mining
Location
Status
Planning
Design
Agreement
Construction
Operation
Closure
Decommission
Website https://www.smb-guinee.com/en/home/

The SMB mining project is a surface bauxite mining operation primarily located in the Boké region of western Guinea. The mine is being developed and operated by SMB, a consortium controlled by three companies (listed below) and the Guinean government. Since its founding in 2014, SMB has become a leading producer and exporter of bauxite, producing 34 million metric tons in 2022 and representing 41% of Guinea’s bauxite exports. Extraction has focused on SMB’s main mining sites: Santou and Houda in the prefecture of Téliméle, and Malapouya and Dabiss, in the prefecture of Boké. The mined ore is then transported by trucks or railway to SMB’s two river terminals: Katougouma and Dapilon. Most of the bauxite mined from the SMB project is then exported to China to be processed into aluminium. The SMB consortium plans to invest a further $1 billion over the next five years to upgrade its river terminals and buy vessels, with the plan to increase its exports by 10 million metric tons a year. The consortium has also said it plans to construct an alumina refinery. Following delays, feasibility studies were submitted in March 2023, but construction of the refinery has not begun.

Impacts

Impact on human rights and communities

The SMB bauxite mining project has a track record of unremedied human rights impacts, including uncompensated or under-compensated taking of land, loss of livelihoods, damage to water sources and impact on access to water, and threats to public health from air pollution.  The negative impacts of mining in the region have led to protests from impacted communities.

Loss of land and livelihoods SMB’s mining activities have resulted in the displacement of local communities and the loss of their lands and livelihoods. To fuel its quick expansion, the SMB consortium provided residents with one-off, cash-for-land payments, leaving farmers without the necessary resources, support or training needed to find new land or livelihoods. The residents have since reported that the compensation provided by SMB was inadequate, inequitably distributed, and lacked transparency, leading to tensions and suspicions of corruption. This has left some regions and villages without any access to cultivable land, as SMB has either taken over or cut off villagers’ access to farmlands.  According to a 2019 study by the Guinean Ministry of Mines, within the next two decades, more than 200,000 acres (or 80,000 hectares) of farmland will be destroyed by bauxite mining in Guinea.

In addition to being displaced and uncompensated or under-compensated for their land, community members’ livelihoods are further impacted by the damage caused by mining. For example, mining operations and infrastructure construction, such as port development, have contaminated remaining agricultural fields with dust, mud, oil, or gas, resulting in reduced yields.  Additionally, fishing activities have been disrupted due to the noise and vibrations caused by mining operations, scaring off wildlife and affecting the livelihoods of local fishermen. Waters that were once plentiful are now facing an unprecedented scarcity of resources (fish, crustaceans, etc), which is adversely impacting both community incomes and food security. Affected communities say they were not adequately informed about the full extent of the damage that would be caused by the project. Several communities have also said that SMB promised to give local people priority for employment but that the company has never delivered on this commitment.

Impacts on health SMB’s activities in Boké have led to health risks for local populations, due to the widespread contamination of water sources and air pollution. Mining runoff and wastewater discharge have contaminated essential rivers and water sources, impacting the quality and availability of drinking water sources. This has resulted in the proliferation of waterborne diseases and gastrointestinal illnesses among residents. For example, a study by the Association Mining Sans Pauvreté (AMSP) in 2019 found that water in the Katougouma port site exhibited highly acidic pH levels. Such acidic water can contain elevated levels of harmful chemicals like aluminum, posing significant risks to aquatic life and human health. Furthermore, salinity levels surpassing World Health Organization (WHO) standards were observed in several localities by Natural Justice, raising concerns about water quality and suitability for consumption.

Beyond water pollution, the adverse effects of bauxite mining extend to air quality. A Human Rights Watch report highlights testimonies from affected villages where red dust from mining operations infiltrates homes and contaminates crops, posing health hazards. Additionally, vehicle emissions from the transportation of bauxite contribute to air pollution, exacerbating health concerns for residents along mining roads and adjacent communities. Despite the mounting evidence of health risks, SMB’s efforts to address these concerns remain inadequate.

Rise in civil unrest and conflicts Since 2015, a series of violent protests have occurred in the Boké region, in part in response to the numerous instances of community displacement, inequitable distribution of benefits, unfair compensation for loss of livelihoods and land, and the severe environmental pollution caused by bauxite mining. According to the independent SMB Community Relation Service, from 2015 to 2018, the Boké prefecture recorded 35 movements of revolts and road barricades by the communities against the mining operations of SMB.


Impact on climate

Guinea will be hard-hit by climate change. The agricultural sector, a primary contributor to the country's GDP and employment, is vulnerable to erratic weather patterns and temperature changes, which can undermine crop yields and food security. Moreover, Guinea’s rich biodiversity will come at risk due to habitat loss as rainfall patterns and temperatures become more unpredictable. These changes will also exacerbate water scarcity, posing significant challenges for local communities and wildlife.

Emissions associated with bauxite refinery SMB plans to build a bauxite refinery powered by fossil fuels, which will have significant ramifications for Guinea’s climate commitments. In its environmental and social impact assessment on the refinery validated in April 2021, SMB indicated its plan to use a coal-burning power plant as the energy source. China’s Ministry of Commerce indicated on June 9, 2020, that six Chinese companies, including SMB,  would use coal and heavy fuel oil as the energy source for their refineries in Guinea. Yet in 2023, facing pressure from communities and civil society organizations, SMB unofficially announced it would not continue to use the coal burning plant for its refinery.

Via a subsidiary, SMB shareholder United Mining Supply (UMS) is currently constructing a natural gas-fired refinery near Dapilon. Given the connection between SMB and UMS, the company will likely shift to using this new gas-powered plant. However, there is no publicly available documentation that confirms this shift - which runs contrary to the requirements of Guinean law, which stipulates that relevant environmental and social impact assessments and feasibility studies must be accessible to civil society.

Despite being marketed as a cleaner fossil fuel, natural gas contributes to greenhouse gas emissions. When burned, natural gas emits about 0.6 kilograms of CO2 per kilowatt-hour. In the context of the refinery, which requires a large amount of energy to convert bauxite into aluminium oxide before export, the total emissions will be substantial.

Moreover, the extraction, processing, and transportation phases of natural gas operations can result in methane leakage. This is especially worrisome because methane is far more effective at trapping heat in the atmosphere than carbon dioxide, about 84 to 87 times more so over a 20-year period. Methane emissions occur through unintended leaks or deliberate venting and flaring. In Guinea, where regulatory oversight may not be as stringent due to technical or personnel limitations, the potential for higher-than-average leaks and losses is significant, raising concerns over the true "cleanliness" of natural gas usage.

Whatever energy source it chooses, SMB’s reliance on a fossil fuel-powered refinery locks Guinea into using dirty fuels for years due to the significant upfront costs and the long lifespan of this kind of facility. This commitment can hinder the country’s transition to greener energy sources, meaning it will be left behind as the world moves towards renewables and may fail to meet its own climate action plan. The reliance on natural gas may also result in financial losses if future policies or market trends favour renewable energies, leaving a dirty, obsolete refinery chugging along without any possible update.

Emissions from processing aluminium The majority of the bauxite mined from the SMB project is exported to China to be processed into aluminium. The production of primary aluminium, particularly the smelting of alumina into aluminium through electrolysis, is known for its high energy intensity. The aluminium industry is responsible for approximately one billion tons of CO2 equivalent annually; around 2% of global greenhouse gas emissions.

One of the primary reasons for the aluminium industry's significant carbon footprint is its heavy reliance on coal power. Globally, 71% of electricity generated for aluminium production comes from fossil fuels, with over 60% sourced from coal-fired power plants. China, home to more than half of the world's primary aluminium production, is particularly dependent on coal, with approximately 90% of Chinese aluminium produced using electricity from coal power plants in 2018.


Impact on nature and environment

The SMB project has various adverse impacts on nature and the environment, such as water pollution, land degradation, deforestation, and endangering of rare species.

Water pollution and land degradation As discussed above, SMB’s operations have resulted in damage to local waterways, both through the construction of mining infrastructure and the runoff of sediment from mines into rivers and streams. If SMB also constructs an alumina refinery, the refinery’s tailings, the materials that are left over after the process of extracting alumina from the bauxite ore (known as “red mud”), contain high concentrations of toxic waste that can spill directly into rivers and major watercourses, posing significant dangers for nearby residents and wildlife.

Destruction of natural ecosystems and endangering rare species The Boké region is home to a variety of rare and endangered species, such as the critically endangered Western Chimpanzee. Bauxite mining activities in the region have caused a rapid decline in their living conditions and are driving them from their natural habitats. The population of Western Chimpanzees in Western Africa has declined from approximately 175,000 in 1990 to an estimated 53,000 in 2019, with about half of the world’s remaining population living in Guinea. Bauxite mining continues to threaten conservation efforts by causing deforestation, the destruction of natural ecosystems, and noise pollution, which all contribute to the displacement and depopulation of protected species. According to a 2019 study by the Guinean Ministry of Mines, within the next two decades, more than 1.1 million acres (or 445,000 hectares) of natural habitat will be destroyed by bauxite mining in Guinea.


Other impacts

Links to impacts at the Simandou iron ore mine SMB’s parent companies are also taking a leading role in Winning Consortium Simandou (WCS), a mining group that, along with Rio Tinto Simfer,  is constructing the Simandou iron ore mine in southeastern Guinea. While the operation of the Simandou mine has yet to begin, the project has been heavily criticised for its potentially severe adverse impacts on human rights, climate, and the environment. For instance, communities surrounding the Simandou project have already suffered impacts related to loss of land, agricultural and fishing livelihoods, pollution of water sources, poor air quality and the destruction of biodiversity. Moreover, there are concerns regarding the project's transparency and accountability, as well as the potential for corruption and conflicts of interest. SMB’s pattern of negligence with respect to human rights and environmental considerations creates serious concerns about WCS’s management of human rights risks for the Simandou project.

Financiers

There is currently no confirmation on where project financing will come from, but both Winning International Group and China Hongqiao Group have banking relationships with several international banks.

Between January 2016 and June 2023, six commercial banks were registered as "chargees" for charges registered against Winning International Group, the majority shareholder of SMB. When a company takes on debt or financing from a bank or other lender, it often provides certain assets or property as security, which are subject to a charge. Thus, the charges indicate that Winning International Group has taken loans from these banks and given certain assets as collateral. The banks involved in these exchanges were BNP Paribas, Chailease Holding, Credit Suisse, DZ Bank, the Export-Import Bank of China, and Standard Chartered (Sources: Profundo finance research, June 2023 & Accounting and Corporate Regulatory Authority of Singapore, February 2024).

Research conducted in December 2023 found that eight banks had provided corporate loans to China Hongqiao Group, a partial owner and operator of SMB. These include AKA Bank, Banco do Brasil, China CITIC Bank, Crédit Agricole, East West Bank, Federated Hermes, ING, and Tai Fung Bank (Inclusive Development International Investment Chain Report, December 2023).

See below for more details on the banks and financing involved.

Institution type
Finance type
Year
Companies

The mine is fully owned by Société Minière de Boké (SMB), a consortium controlled by three companies and the Guinean government. The consortium investors are:

  • Winning International Group — a privately held Singaporean company that owns a 40.5% stake in SMB. The company mainly focuses on shipping, mining, railways, and handles the overseas shipping of SMB’s bauxite.

  • United Mining Supply (UMS) — a privately held company that owns a 27% stake in SMB. UMS provides transport and logistic services for mining and industrial companies in Guinea and West Africa.

  • Shandong Weiqiao Aluminium and Power, a subsidiary of China Hongqiao Group — a large publicly traded Chinese aluminium company that owns a 22.5% stake in SMB. The company processes the bauxite mined at SMB into aluminium and sells it to customers.

  • The Guinean Government, which holds the remaining 10%.

Project sponsors

China Hongqiao Group

China
Website

United Mining Supply

South Africa
Website

Winning International Group

Singapore
Website
No companies
Governance
Norms & standards

Applicable norms and standards

Equator Principles
IFC Performance Standard 1: Assessment and Management of Environmental and Social Risks and Impacts
IFC Performance Standard 2: Labor and Working Conditions
IFC Performance Standard 3: Resource Efficiency and Pollution Prevention
IFC Performance Standard 4: Community Health, Safety, and Security
IFC Performance Standard 5: Land Acquisition and Involuntary Resettlement
IFC Performance Standard 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources
IFC Performance Standard 7: Indigenous Peoples
IFC Performance Standard 8: Cultural Heritage
UN Guiding Principles on Business and Human Rights
Universal Declaration of Human Rights
Voluntary Principles on Security and Human Rights
Maps
12823
sitesactivites_smb_fr.jpeg
center
Mapping of SMB activity sites.
Photo: Image from SMB project website
12824
imageresize.jpeg
center
The railway and project sites of SMB.
Photo: Image published by Africa Intelligence on 11 July 2022

 

News
BankTrack
Partners
Blog
External
BankTrack news BankTrack blog Partner news Partner blog

Guinea’s SMB to invest up to $1 billion to boost bauxite exports

2024-02-05 | Mining.com
BankTrack news BankTrack blog Partner news Partner blog

On frontier of new ‘gold rush,’ quest for coveted EV metals yields misery

2023-04-27 | The Washington Post
BankTrack news BankTrack blog Partner news Partner blog

Alumina refinery project proposals set for two-week deadline by Guinea

2023-03-05 | AL Circle
BankTrack news BankTrack blog Partner news Partner blog

Guinea extends deadline for bauxite miners to present refinery plans

2022-06-10 | Reuters
BankTrack news BankTrack blog Partner news Partner blog

SMB spends US $1 billion to open bauxite railway in Guinea

2021-06-23 | Shanghai Metals Market
BankTrack news BankTrack blog Partner news Partner blog

China’s top bauxite supplier set to boost output as rail starts

2021-06-17 | Mining.com
BankTrack news BankTrack blog Partner news Partner blog

China-backed consortium wins $14bn Guinea iron ore deal

2019-11-13 | Aljazeera
BankTrack news BankTrack blog Partner news Partner blog

Dapilon-Santou Rail Project

2019-10-29 | Railway Technology
BankTrack news BankTrack blog Partner news Partner blog

Bauxite mining and Chinese dam push Guinea’s chimpanzees to the brink

2019-05-21 | Mongabay
BankTrack news BankTrack blog Partner news Partner blog

Guinea: SMB-Winning Consortium Launches New 135-kilometer Railway

2019-04-10 | Kapital Afrik
BankTrack news BankTrack blog Partner news Partner blog

SMB-Winning Boke Bauxite Mining Project

2018-12-31 | NS Energy
BankTrack news BankTrack blog Partner news Partner blog

SMB plans Guinea alumina refinery by 2022

2017-12-04 | Mining.com
BankTrack news BankTrack blog Partner news Partner blog

Guinea town's unrest a cautionary tale for African mining

2017-05-12 | Reuters, Reuters
Resources
Documents
2019-03-21 00:00:00

Bauxite Mining in the Boké Region (Western Guinea): Method Used and Impacts on Physical Environment

Other document
2019-03-21 00:00:00 | MODESTUM, Author: Souare Sidiki
2022-03-22 00:00:00

Bauxite Mining Conflicts in Guinea: Causes Identification, Analysis, and Countermeasures

Other document
2022-03-22 00:00:00 | HAL Open Science, Authors: Issiagha Camara, Jiang Deyi, Oumar Barry, & Frédéric Caille
2023-02-10 00:00:00

Socio-environmental impact of mining activities in Guinea: The case of bauxite extraction in the region of Boké

Other document
2023-02-10 00:00:00 | Science Direct, Authors: Ilaria Dibattista, Abdoul Rachid Camara, Ingrid Molderez, Edoardo Maria Benassai, & Francesco Palozza
2023-02-28 00:00:00

Community Audit of Environmental and Social Impacts of the Société Minière de Boké in Guinea

NGO document
2023-02-28 00:00:00 | Natural Justice, Association pour le Développement Rural et l’Entraide Mutuelle en Guinée (ADREMGUI), ONG Mines Sans Pauvrete (AMSP), Center for Transitional Environmental Accountability (CTEA), and Les Mêmes Droits pour Tous (MDT)
2018-10-31 00:00:00

“What Do We Get Out of It?” The Human Rights Impact of Bauxite Mining in Guinea

NGO document
2018-10-31 00:00:00 | Human Rights Watch
2021-07-22 00:00:00

Aluminum: The Car Industry’s Blind Spot

NGO document
2021-07-22 00:00:00 | Human Rights Watch
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