Guinea – Military Junta Stokes Nerves of Mining Sector

Bob Barry / Deutsche Welle

23 MARCH 2022

Deutsche Welle (Bonn) By Isaac Kaledzi

Mining is a key driver of economic growth in Guinea. But the military junta’s unyielding approach toward a major iron ore project could be doing the country more harm than good.

Since seizing power in September 2021, Guinea’s military junta has increasingly attempted to streamline mining activities and agreements to benefit what leaders have repeatedly dubbed “Guinea’s interests.”

Led by Colonel Mamady Doumbouya, the junta has spent months at loggerheads with foreign mining companies operating in the West African country, despite earlier assurances of continuity in mining operations.

Guinea is the world’s second-largest producer of bauxite, a main source of aluminum. According to the World Bank, Guinea’s mining sector contributes approximately 35% to the country’s GDP. But the recent upheavals in the sector could threaten the future of the industry.

Operations at Simandou halted

Anglo-Australian mining giant Rio Tinto and its partners have been ordered to stop all work on the vast Simandou iron ore project after Doumbouya requested clarification on how the mine will preserve Guinea’s national interests.

In a statement, the ruling junta said Doumbouya had “requested the implementation of the exploitation of the Simandou deposit taking into account the interests of Guinea. Unfortunately, to date, despite his request, which dates from December 2021, there has been no progress.”

The provisional government says any developer of the mine must also build a railway from Simandou, in the southeast of the country, to the port of Conakry to ship their product overseas. If they do not comply, developers will risk losing the project.

In 2021, Rio Tinto flagged plans to built a shorter and less-costly railway to Nimba, in Liberia; however, the proposal was rejected by Guinea.

Guinea currently owns a 15% stake in Blocks 3 and 4 of Simandou, while Rio Tinto and China’s Aluminam Corp. own stakes of 40% and 15%, respectively.

With estimated iron ore reserves of 2.4 billion tons, Simandou is considered one of the world’s largest mines of its kind. However, ongoing legal disputes and the costs associated with infrastructure have left it largely untapped.

Other mining companies ‘spooked’

With the future of the Simandou project in doubt, analysts are warning of potentially devastating consequences for Guineans.

Economist Mamady Fanta Keita told DW that more than 45,000 people would risk losing their jobs should the Simandou project not resume operation soon.

“Simandou is already one of the biggest iron ore mining projects in Africa,” he said. “Not only is it mining iron, but it [supports] lots of of infrastructure programs in Guinea…Therefore, the stopping of works at Simandou is a real problem for the people.”

Though the military junta has maintained that it simply wants to secure the best deals for Guinea, Keita is concerned that officials are taking the wrong approach.

“This could have been done without hindering the work at Simandou,” he said. “I have seen many people who are directly affected by the decision. Even my friends working at the Simandou project are at home not working.”

In an attempt to find a way forward, talks are now underway in Guinea between Rio Tinto officials and the military junta.

“We’re in discussion with the government of Guinea and support their view that co-investment and the development of rail and port infrastructure is the best way to develop Simandou projects,” Rio Tinto’s president of Copper International Operations, Bold Baatar, told reporters in Conakry last week.

Baatar said the mining company aimed to “work with the government and all other partners to create the appropriate structure to advance the Simandou project for Guinea and all stakeholders.”

This is not the first time that coup leaders have attempted to interfere with existing mining deals in Guinea.

In 2008 then military leader Captain Moussa Dadis Camara also vowed to block mining sector projects and renegotiate contracts after seizing power following the death of longtime President Lansana Conte.

Karim Kamara contributed to this article.

Edited by: Ineke Mules

SOURCE: https://allafrica.com/stories/202203240046.html

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