Guinea’s ambitions to move beyond raw mineral exports received a major boost after Aluminum Corp of China (Chalco), China’s largest state-owned aluminum producer, agreed to invest $1 billion in a new alumina refinery in the West African country.

The Beijing-based company said it will establish a new entity to develop a 1.2 million-ton-per-year alumina plant in Guinea, deepening China’s growing footprint in Africa’s bauxite-rich economies.

Under the agreement, the Guinean government will receive a 5% stake at little or no cost and retain the option to raise its holding to as much as 35% at market value.

The project marks Chalco’s first alumina refinery outside China and builds on more than a decade of operations at the company’s Boffa bauxite mine in Guinea. The investment still requires approval from shareholders and Guinean authorities.

Chinese firms, including China Hongqiao Group, have increasingly expanded into bauxite-rich countries as Beijing seeks to secure long-term raw material supplies for its aluminum industry. Chinese smelters currently account for more than half of global aluminum production, but overseas expansion has accelerated as China approaches a government-imposed domestic production cap aimed at reducing emissions.

Guinea, which holds the world’s largest bauxite reserves, has intensified efforts to force miners to refine more minerals locally rather than export raw ore. Africa controls nearly 29% of global bauxite reserves but less than 1% of global alumina refining capacity, highlighting the continent’s long-standing struggle to capture more value from its resources.

The push for local beneficiation has, however, created tensions with foreign operators. Last year, Guinea revoked a major bauxite concession held by Emirates Global Aluminium’s subsidiary, citing mining code violations, prompting the company to call the decision a breach of contractual rights.

Across Africa, countries including Guinea, Ghana, Cameroon, and Nigeria are now pursuing billion-dollar refinery projects as governments race to industrialise their mining sectors and reduce dependence on raw commodity exports.