Dec. 23 (Bloomberg) -- A group of Guinean army officers said it suspended the constitution and dissolved the government after the death of President Lansana Conte, who ruled the west African bauxite exporter for 24 years.

The action threatens to disrupt the economy of the country that has the world’s biggest reserves of bauxite, an ore used to make alumina, the raw material used to produce aluminum. United Co. Rusal, Rio Tinto Alcan Inc and Alcoa Inc. run bauxite and alumina operations in Guinea, while BHP Billiton Ltd. is considering developing an alumina refinery there.

A military group calling itself the National Council for Democracy and Development pledged to set up a government of national unity. Conte’s rule was marred by delayed elections, boycotted referendums, strikes and protests. Citizens of the country of 9.4 million people were advised to stay indoors.

In a statement read on state radio, Captain Moussa Dabiss Camara cited “the incapacity of the republican institutions to resolve the crises, the incapacity of the government to supply Guineans with basic social services.” He also criticized the government’s failure to revise contracts with mining companies.

The speaker of Guinea’s parliament said that only part of the army supports the coup attempt.

“Most of the army is loyal and republican,” Aboubacar Sompare said in an interview broadcast by Radio France Internationale. “I don’t think the majority of the Guinean army can approve a takeover of power that is not covered by the constitution. Nothing is so far lost.”

Elections will be called soon, he added.

‘Coup In Progress’

“It is likely that we are seeing a coup in progress,” Thoko Kaime, head of the Africa division of London-based Exclusive Analysis, said. “It raises the risk of counter coups as it’s unlikely that all sections of the army will back it.”

“I doubt whether all the middle or lower ranks are going to listen to the government or their commanders,” he said.

Conte, who was 74, was a career soldier who seized power on April 3, 1984, after the death of president Ahmed Sekou Toure. He died after a long illness, the speaker of parliament, Sompare, said on state broadcaster RTG National TV earlier today. Conte suffered from chronic diabetes and was once diagnosed with leukemia.

Government ministers and the heads of national institutions have been summoned by the army to the Alpha Yaya Diallo military camp in the capital, Conakry, to ensure their safety, Dabiss Camara said.

‘Stay At Home’

“In Conakry we are advising our staff to stay at home for the time being,” Nick Cobban, a spokesman for Rio Tinto Group, said from London.

Rio is in a dispute with the government over its rights to the Simandou iron-ore deposit, where it has considered building a $6 billion operation.

AngloGold Ashanti Ltd., which owns the Siguiri gold mine in the country, is “monitoring” the situation and held a meeting with staff at the mine today, Alan Fine, a company spokesman, said from Johannesburg. Rusal is also “monitoring” the situation the company said by e-mail. BHP declined to comment.

Guinea, a former French colony, produced 14 million metric tons of bauxite last year. It is the world’s fourth-biggest producer of the ore after Australia, Brazil and China, according to the U.S. Geological Survey. Bauxite and related industries account for about 80 percent of its foreign exchange earnings.

Alumina is trading at $225 a ton in European trading and has fallen 37 percent this year, according to Metal Bulletin, a London-based metals publication. Aluminum for delivery in three months rose as much as 1.7 percent to $1,565 a ton on the London Metal Exchange because of concern over supplies, Randy North, a trader at RBC Capital Markets, in London said.

Maintain Production

The army will want to “maintain production and exports in order for hard currency to be earned. The last thing they want to do is offend foreign investors,” Robin Bhar, an analyst at Calyon in London, said.

“We are not expecting massive disruptions,” Bhar said. “There may be some protests by various people -- workers. But until that happens we shouldn’t expect too much disruption.”

Violence in Guinea in 2007 caused the alumina price to rally 76 percent in the first two months of the year.

Conte’s government had to contend with increased protests against its rule in recent years.

In early 2007, at least 110 people were killed by security forces after protests demanding Conte’s resignation, according to Human Rights Watch. The year before soldiers shot dead 13 unarmed people during demonstrations against rising food prices, the New York-based group said.

African Union

The African Union condemned what it called a “military takeover” in Guinea.

“We call for the respect of the relevant provisions of the constitution of the country,” El Ghassim Wane, a spokesman for the AU’s peace and security council, said in an interview in Addis Ababa, Ethiopia’s capital. The council will meet in the next two days to discuss Guinea, he said. The U.S. said it’s consulting the African Union and other partners over the crisis.

Guinea’s economy grew 1.8 percent last year compared with 2.4 percent in 2006, according to the International Monetary Fund. It has a gross domestic product of $4.53 billion, according to the IMF. South Africa, the continent’s biggest economy, has a gross domestic product of $278 billion.

The IMF agreed in December last year to lend Guinea $75.2 million as part of a three-year program.

The African Development Bank said on Dec. 3 that it would provide finance of $200 million and mobilize a further $250 million for the $6.3 billion bauxite mine and alumina refinery planned by BHP and Global Alumina Corp. Both companies will hold a third of the project each while Dubai Aluminium Co. will control 25 percent and Mubadala Development Co. the rest. The project’s total cost includes associated infrastructure.

To contact the reporter on this story: Alpha Camara in Conakry, Guinea via Johannesburg at asguazzin@bloomberg.netAntony Sguazzin in Johannesburg at asguazzin@bloomberg.net.

Last Updated: December 23, 2008 11:11 EST