10 July 2018
Deals | Africa | China | Projects (Finance & Infrastructure)
Gide has advised Chalco Hong Kong Limited (Chalco HK) on the negotiation and signing of a mining convention with the Republic of Guinea for the development of the Boffa Nord and Boffa Sud bauxite mining blocks. The project has an initial investment valued at approximately USD 706 million.
Chalco HK, part of the state-owned group Aluminum Corporation of China (Chinalco), will develop and exploit the mine, which will have an initial production capacity of 12 million tons per year, through its Guinean project companies.
The first phase also includes the construction and operation of related infrastructure, including onshore, fluvial and maritime transport and transhipment infrastructure and energy production facilities. In particular, minerals will be transported through a channel to be built and used in common with other mining operators in the region.
The project is highly strategic for Chinalco, the second-largest producer of alumina and third-largest producer of aluminium in the world, as it will allow the Fortune Global 500 company to secure its bauxite supply for the upcoming decades. Bauxite is a primary raw material for alumina production.
It also forms part of the strategic cooperation between China and Guinea, which entered into a framework agreement last September that will allow the West African nation to receive important financing from China to develop its infrastructure in exchange for access to its mineral resources. The investment is expected to boost the Guinean economy, creating jobs, and aiding the industrialisation of the country.
Gide has been advising Chalco HK since 2016 on all legal and tax aspects of the project, including legal due diligence, legal and tax structuring, and negotiation and drafting of all transaction documents.
The Gide team is composed of Guo Min, partner, and Chen Xi, counsel, both based in Beijing; as well as Alix Deffrennes, counsel, and Célia Alao, associate, both based in Paris.
Gide is also advising Chinalco on the Simandou iron ore project, one of the largest mining projects in the world.
As one of the first foreign law firms to operate in China, Gide has significant experience providing advice to major Chinese companies on their outbound investments, especially in Europe and Africa. In particular for the latter, Gide is a leading international firm in French-speaking countries for Sino-African projects.