Guinea says 2012 growth target at risk

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Mining diamonds in Guinea

(Reuters) - A slowdown in alumina and diamond production in early 2012 is jeopardising Guinea's target for securing economic growth of 4.7 percent for the year as a whole, an economy and finance ministry official said on Monday.

 

Guinea, the world's largest exporter of the aluminium ore bauxite, has seen strikes over pay and benefits hit production this year at the Friguia alumina refinery operated by Russia's UC RUSAL - the only one in the West African country.

A ministry report showed production of alumina, which is ultimately converted into the metal aluminium, slipped to 182,560 tonnes in the first four months of this year from 184,090 tonnes for the same period last year.

 

Diamond output was hit by a decree banning artisanal production of diamonds and gold in an attempt to promote the agriculture sector. The report said production of the gems falling to 117,570 carats for the first four months of the year compared to 161,330 carats for the same period last year.

 

"In current conditions, if these trends continue, it could affect our target of 4.7 percent growth this year," Emmanuel Sossouadouno, a senior official in the economic studies section in the economy and finance ministry told Reuters.

 

"The situation could get even worse in coming months given what is happening in Friguia in the past two months," he said. Union and company officials said last month that no alumina had been produced at the plant since April 3. The firm said at the time output was not hit as RUSAL compensated the shortfall in alumina from its reserves but it also recognised that the plant was not fully operational.

 

Guinea ended two years of rule by a military junta with presidential elections in late 2010 that brought President Alpha Conde to power, yet parliamentary polls - the final step in the transition to civilian rule - have been repeatedly delayed.

 

The West African country in April secured $344 million in debt relief from the Paris Club of creditor governments and the International Monetary Fund said it could soon see further debts cancelled under its Heavily Indebted Poor Country (HIPC) scheme.

 

Analysts say Guinea urgently needs extra funds to carry out a range of judiciary reforms and poverty-tackling measures. (Reporting by Saliou Samb; Writing by Mark John)

 

 

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