Coup puts spotlight on Guinea’s huge bauxite reserves
The latest coup in bauxite-rich Guinea is reverberating across the market for aluminium, although for now it appears the global production chain is not under threat, analysts say.
Aluminium prices, already buoyed by a gradual economic recovery, topped $2,800 a tonne to reach a 13-year high on Wednesday after the coup.
Here’s why Guinea is such a big market factor:
A country of 13 million inhabitants, Guinea possesses the world’s largest reserves of bauxite, the reddish or grey rock that is extracted into aluminium oxide, which is then smelted into aluminium.
The West African state holds estimated bauxite reserves of 7.4 billion tonnes, or around one quarter of the global total, US Geological Survey (USGS) said last year.
Domestic and foreign firms last year produced 82 million tonnes of bauxite in Guinea.
They were surpassed only by Australia, which has the world’s second-largest reserves ahead of Vietnam and Brazil.
China – with around seven times less reserves than Guinea – imports around half its needs from there, according to raw materials consultancy CRU, increasingly upping purchases in recent years “following the deterioration in quantity and quality of domestic bauxite reserve.”
The mining sector in Guinea, which includes gold and diamonds, is crucial to the national economy, accounting for some 15 percent of GDP and around 80 percent of exports, according to the World Bank’s Macro Poverty Outlook.
Cause for concern?
Beyond potential short term supply wobbles, observers are confident the coup will not have lasting effects.
“It remains most likely that miners will be able to continue operating, even though we lack clarity on the direction of the country’s mining policy and who will manage the government’s portfolio,” notes Eric Humphery-Smith, Africa analyst at risk intelligence company Verisk Maplecroft.
In one of his first declarations after the weekend takeover, coup leader Lieutenant-Colonel Mamady Doumbouya sought to reassure business partners and foreign investors.
Guinea will “uphold all its undertakings (and) mining agreements” and “maritime borders will remain open for export activities,” he said on Monday.
“The new leadership declared that bauxite production is very important to the country and should continue as usual. I would not expect severe disruptions to production and exports if safety can be guaranteed,” Commerzbank analyst Daniel Briesemann told AFP.
Even so, Humphery-Smith warned there is some risk, albeit “remote,” that a future Guinean government may push through a renegotiation of contracts or expropriate foreign-owned mine assets.
Despite Doumbouya’s promises, foreign operators in Guinea are keeping a close eye on the turbulence, although they say that for now their operations have not suffered any impact.
Russian aluminium giant Rusal, which produces half of its bauxite output in Guinea – 7.3 million tonnes according to the journal Kommersant – said Monday it was considering evacuating Guinea-based staff should the situation “escalate.”
Kremlin spokesman Dmitri Peskov said Tuesday he was waiting to see that “the interests of our businessmen and firms are not affected and that their interests are guaranteed.”
South African gold firm AngloGold Ashanti said Monday operations at its Siguiri mine were functioning “normally.”
Aluminium prices had already been soaring well before the coup, rising by about 40 percent since January as global economic activity bounces back from the Covid-19 trough.
Also pushing prices higher are rising electricity prices in China, which has led to a sag in production at a number of foundries in its western Xinjiang region – aluminium smelting consumes voracious quantities of energy.
According to CRU, Guinea’s political crisis ought not to weigh unduly heavily on the production chain – the consultancy notes Beijing presides over healthy stocks.
“CRU currently estimates cumulative bauxite stockpiles to exceed 50 million tons in China, and so be equivalent to around six months of imported bauxite consumption.”
10 Government Jobs India Is Obsessed With And For Good Reason
In India, government jobs are lucrative and as a result, sought-after. The benefits on offer like stability, timely income, additional allowances, housing facilities among others, make them enticing for young people.
There are various types of government jobs in the country. There are administrative/civil services at the top of the government jobs pyramid and then there are many other government jobs (e.g. railways, local municipality, government schools, etc.). The competition for these jobs is intense and many students end up doing nothing for years, focusing solely on preparing for them. Exams such as Union Public Service Commission (UPSC) are known to be very competitive and it is easy to understand why someone would want to do nothing but prepare for them full-time.
It’s a no-brainer as to why millions of students are interested in these types of jobs. The above mentioned reasons are enough to lure people into public sector.
Let’s look at the 10 government jobs India is obsessed with and for good reason.
- Indian Foreign Service
Indian Foreign Service (IFS) is an administrative diplomat under Group A and Group B civil services. It is one of the premier civil services, which marks India’s presence abroad.
The service is entrusted to conduct diplomacy, mark India presence in various International organisation and manage foreign relations of India. It is the body of career diplomats serving in more than 160 Indian Diplomatic Missions and International Organizations around the world.
An IFS officer gets an attractive salary and not to mention the perks.
- Indian Administrative Service and Indian Police Service
Indian Administrative Service (IAS) is arguably the most sought-after job in India. Ask any kid, anywhere in the country, what he/she wants to become growing up. They will gleefully answer, an IAS officer.
Indian Police Services (IPS) too, is a job that attracts millions of candidates every year.
Being in the IAS or IPS is a very big deal, as they are one of the most prestigious posts in civil services. On one hand, these officers get to work in diverse field and are part of policymaking in India, and on the other hand, the perks of these jobs are unmatchable.
More importantly, IAS and IPS officer are bestowed with huge power in their hands.
Perks, security of job and power make these jobs the most desirable among the youth.
- Public Sector Undertakings
Today government jobs are one of the best decisions you can take for yourself and your family, and an important part of that is the Public Sector Undertakings (PSUs). Some of the best- known public sector units are Hindustan Petroleum Corporation Limited (HPCL), Indian Oil Corporation Limited (IOCL), Oil and Natural Gas Corporation (ONGC), Bharat Heavy Electricals Limited (BHEL) etc.
PSUs recruit many people every year and offer numerous benefits to their workers. The biggest reasons why people lean towards this job is due to its amazing salary structure, fixed work hours, job security and the fact that it is not very stressful.
- Defence Services - Navy, Army and Air Force
Entering the National Defence Academy (NDA) is the best option if you are looking for a well paying and beneficial job. This job provides a candidate with the opportunity to enter into the Indian Army, Navy and such defence institutions.
Rashtra Defence Academy
Good payment, official residence, medical facilities are some of the perks provided by this job. Apart from the above-mentioned benefits, being in the defence services, discipline and being responsible comes naturally. You learn to be more organized in your life.
- RBI Grade B Officer
Reserve Bank of India (RBI) is the country’s central bank and regulatory body. While RBI jobs don’t make much noise, they quietly are some of the lucrative you will find going around.
Grade B of RBI is the best position for any interested applicant and is the highest-level managerial job of RBI. The typical working salary of RBI Grade B is about sixty to seventy thousand rupees with full Dearness Allowance (DA).
The other perks involve a spacious accommodation in posh localities, along with one-eighty litres of petrol per annually. They can raise their kids for free in every other location. They even get one lakh after each year for travelling across the world.
Bank jobs are easy to fit in. They provide a comfortable working space. All in all, it is a good option for people who want to work in a challenging environment of work balance.
- Scientists with ISRO/DRDO
It’s not easy being a scientist, but it’s definitely worth it. The scientists are the developing roots of the country. They are the revolutionists who bring changes for the good and betterment of the people and the country on the whole.
Defence Research and Development Organisation (DRDO), Indian Space Research Organisation (ISRO), are just some of the reputable institutions which are run by government scientists. The salary of a government scientist equivalent and sometimes better than the private ones.
The perks such as individual houses in which they are accommodated, medical insurance are some of the benefits associated with the job. The work pressure is a little high and the job is also demanding. But the benefits are all worth it.
- Indian Forest Service
If you are looking for an escape from the hustle bustle of the city, and live in the lap of nature, Indian Forest Service (IFS) will suit you perfectly.
The officers are supposed to work in forestry as well as wild life. Life of an IFS officer is full of adventures and no better way than enjoying your time in pristine environment.
Officers are tasked with protecting the environment, regulate mines and forest activities in the protected areas and look after the needs of forest dwellers.
- State Public Service Commissions
The State Public Service Commission conducts PSC examinations and recruits candidates for various administrative posts in the State. advises on methods of recruitment to various Civil Services of the States.
Apart from the appointment of the candidates, it also sets rules for granting promotions, transferring candidates from one service to another, and promoting to higher ranks.
The jobs offered by state public service commissions are almost identical to that of a civil servant. Many local government jobs like Sub-District Magistrate (SDM), Excise and Taxation Officer (ETO), Tehsildar, among others are paid very well and come with extra benefits such as official residence, medical facilities and such.
- Officers with Indian Railways
Indian Railways is the largest employer in India and is also one of the most sought-after jobs in the country.
If you are an engineer then, becoming a railway engineer is the best career option. Particularly in India, Railways have the highest number of government jobs for engineers.
Railway engineers enjoy luxurious houses and various other benefits provided by the government of India. Indian Railway also recruits non-technical graduates. Job pressure and work demand are also manageable.
10.Government lecturer/ university professors
If you are into teaching then becoming a government university lecturer is the best choice. A very good paycheck and a huge number of holidays are just some of the perks of this job. You can inspire the young generation of the nation. This is also one of the best options to secure a central government job for graduates.
The job pressure is minimal and the fun of spending time with young minds is immense. Lecturers are even encouraged to take up research that is usually funded by the government.
‘Govt considering foreign institutional investment of up to 20% in LIC IPO’
Indian government is considering allowing foreign institutional investment of up to 20% in Corporation, according to a government source, reported Reuters on Wednesday.
As per Sebi (Securities and Exchange Board of India) rules, foreign portfolio investors (FPI) are permitted to buy shares in a public offer.
However, since the LIC Act has no provision for foreign investments, there is a need to align the proposed LIC IPO with Sebi norms regarding foreign investor participation.
The government has appointed 10 merchant bankers including Goldman Sachs (India) Securities, Citigroup Global Markets India, and Nomura Financial Advisory and Securities India to manage the mega initial public offering of country’s largest insurer LIC. The listing of LIC is set to be India’s biggest ever IPO, with the government aiming to raise up to Rs 90,000 crore ($12.24 billion) from its stake sale.
Other selected bankers include SBI Capital Market, JM Financial, Axis Capital, BofA Securities, JP Morgan India, ICICI Securities, and Kotak Mahindra Capital Co Ltd, a circular on the divestment department website said. “Government has finalised the book running lead managers and some other advisors for the IPO of LIC,” DIPAM Secretary Tuhin Kanta Pandey tweeted on Wednesday.
The disinvestment department had invited applications for the appointment of merchant bankers on July 15. Following this, 16 merchant bankers made presentations for managing listing and partial disinvestment of Corporation (LIC).
The Department of Investment and Public Asset Management (DIPAM) is also in the process of appointing a legal adviser for the stake sale and the last date for putting bids is September 16.
Actuarial firm Milliman Advisors LLP India has already been appointed to assess the embedded value of LIC ahead of the IPO, which is likely in the January-March quarter of 2022.
The government is also mulling allowing foreign investors to pick up stakes in the country’s largest insurer LIC.
The Cabinet Committee on Economic Affairs had last month cleared the initial public offering proposal of Corp of India.
The ministerial panel known as the Alternative Mechanism on strategic disinvestment will now decide on the quantum of stake to be divested by the government.
“The potential size of the IPO is expected to be far larger than any precedent in Indian markets,” the department had said.
The listing of LIC will be crucial for the government in meeting its disinvestment target of Rs 1.75 trillion for 2021-22 (April-March).
So far this financial year, Rs 8,368 crore has been mopped up through minority stake sales in PSU and the sale of SUUTI (Specified Undertaking of the Unit Trust of India) stake in Axis Bank.