Despite the delays and uncertainties facing Chalco and its joint venture partner Rio Tinto in the Simandou project in Guinea, China Power Investment Corporation (CPIC) is set to become a neighbour.

CPIC has announced that it has signed a US$6 billion deal with the Guinea government to build a city and port, which will serve as the basis of a huge bauxite and alumina project there.

According to the reports in the Chinese press, CPIC will build an alumina refinery with initial design capacity of 4 million tonnes, growing eventually to 8mt. The bauxite mine will start life with a capacity of 12mt. Construction is said to start in 204 with alumina shipping from the plant by 2020, presumably giving plenty of time to develop the port infrastructure.

This says something about China’s thirst for bauxite and alumina, as opposed to the rhetoric from some quarters that China should import the metal, not the raw material. It’s a huge investment in a difficult and remote location, especially when one considers that CPIC could have chosen to work with the Indonesian or Australian governments to develop resources that are much closer to China.

Because let’s face it, no matter how good Guinea’s government, infrastructure, costs, reserves and other assets might be, there’s a big negative working against it, at least for the Chinese - it’s on the wrong side of Africa. That alumina will have to travel all the way down the west coast of Africa before the ship can turn left and head for the Malacca Straits, then left again for the sail up to China.

The curious thing is, the Chinese government owns both Chinalco and CPIC. And CPIC is not in aluminium as its primary game - it is the company building some of China’s nuclear power stations, and owns several coal-fired power plants as well. One wonders whether the longer-term play here is to have a smelter in Guinea as well. That would allow CPIC to get into what it is good at - building power stations.