News / Africa

Analysts: Guinea Mining Deal Could Open Doors for More Investment

A cargo ship is loaded with bauxite at the bauxite factory of Guinea's largest mining firm, Compagnie des Bauxites de Guinee (CBG), at Kamsar, a town north of the capital Conakry (2008 file photo)
A cargo ship is loaded with bauxite at the bauxite factory of Guinea's largest mining firm, Compagnie des Bauxites de Guinee (CBG), at Kamsar, a town north of the capital Conakry (2008 file photo)

The world's top bauxite producer, Guinea, recently signed its first mining agreement since the country's return to democracy, which analysts say may expedite the development of its lucrative mining sector.  

Australian mining giant Rio Tinto has agreed to pay Guinea $700 million for the right to mine iron ore in two blocks of the country's southern Simandou mountains.

As part of the deal, a new rail line and port will be built to transport ore from the mines once it starts producing by around 2015.

New prospects


Guinea's budget minister, Mohamed Diare, hailed the agreement as a sign that Guinea's fortunes could be turning.

Diare said it opens horizons for negotiations with other miners, which will enable the country to tackle the enormous and legitimate needs of its people, while also galvanizing development in other sectors of the economy.

The minister added that Guinea wants to move faster to finalize its mining code to ensure that other companies already operating in the region are complying with the new rules.

Rio Tinto once controlled the whole Simandou block but was stripped of its northern half in 2008. After months of uncertainty over whether it would lose the other half, the new deal allows it to continue operating and opens the way for billions more in investment.

Democracy to help business, development


Guinea is emerging from a long period of unrest after a bloodless coup in 2008 brought about two years of chaotic military rule. The country successfully held elections at the end of December, re-establishing democratic rule.

The new government, led by President Alpha Conde, has accused the former military junta of pilfering state coffers and has promised to bring more prosperity to its mostly impoverished population.

Guinea now wants to capitalize on its bountiful resources, especially mining, which accounts for 70 percent of the country's exports.

Analysts agree that this deal could be a sign of real change.

Guinean economist Mohamed Kourouma says it will reassure investors in the mining sector and boost the country's image as one where real contracts can be signed without bribery or corruption.

Some remain cautious


However, some warn that it's too soon to tell if this will bring broader reform. Guinean journalist Aboubabcar Diallo is one critic of the agreement.

He says the agreement introduces the possibility that all of Guinea's resources could be auctioned off to the highest bidder, opening the country to a bidding war.

Africa director for the Eurasia Group, Philippe de Pontet, says there is reason to be cautious but that overall this is a positive step.

“The government is clearly not going down the path of expropriation or rank resource nationalism, but is looking for a win-win on the country's tremendous iron-ore, bauxite and gold reserves' potential,” he said.

De Pontet says if investors see other re-negotiations go smoothly, this is a good way for Guinea to leverage its mining assets to rebuild its infrastructure, including rail, ports and roads.

You May Like

China Announces Corruption Probe into Senior Ex-Leader

Former security chief and member of Politburo Standing Committee, Zhou Yongkang, being probed for suspected 'serious disciplinary violation' More

India, US Look to Reset Ties During Kerry Visit

This week's talks will be first high level interaction between two countries since Prime Minister Narendra Modi took charge More

Video Young African Leadership Program Renamed to Honor Mandela

YALI program, launched by President Obama in 2010, aims to build skills in business, entrepreneurship, public management and civic leadership More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Students in Business for Themselvesi
X
Mike O'Sullivan
July 26, 2014 11:04 AM
They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Students in Business for Themselves

They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Astronauts Train in Underwater Lab

In the world’s only underwater laboratory, four U.S. astronauts train for a planned visit to an asteroid. The lab - called Aquarius- is located five kilometers off Key Largo, in southern Florida. Living in close quarters and making excursions only into the surrounding ocean, they try to simulate the daily routine of a crew that will someday travel to collect samples of a rock orbiting far away from earth. VOA’s George Putic has more.
Video

Video Not Even Monks Spared From Thailand’s Junta-Backed Morality Push

With Thailand’s military government firmly in control after May’s bloodless coup, authorities are carrying out plans they say are aimed at restoring discipline, morality and patriotism to all Thais. The measures include a crackdown on illegal gambling, education reforms to promote students’ moral development, and a new 24-hour phone hotline for citizens to report misbehaving monks. Steve Sandford reports from Bangkok.
Video

Video Virtual Program Teaches Farming Skills

In a fast-changing world beset by unpredictable climate conditions, farmers cannot afford to ignore new technology. Researchers in Australia are developing an online virtual world program to share information about climate change and more sustainable farming techniques for sugar cane growers. As VOA's Zlatica Hoke reports, the idea is to create a wider support network for farmers.
Video

Video Airline Expert: Missile will Show Signature on Debris

The debris field from Malaysia Airlines Flight 17 is spread over a 21-kilometer radius in eastern Ukraine. It is expected to take investigators months to sort through the airplane pieces to learn about the missile that brought down the jetliner and who fired it. VOAs Carolyn Presutti explains how this work will be done.
Video

Video Treatment for Childhood Epilepsy Heats up Medical Marijuana Debate

In the United States, marijuana is classed as an illegal drug by the federal government. But nearly half the states have legalized it, to some degree. Proponents say some strains of marijuana might have exceptional health benefits, for treating pain or inflammation in chronic conditions such as cancer, multiple sclerosis and epilepsy. Shelley Schlender reports on a strain of medical marijuana developed in Colorado that is reputed to reduce seizures in childhood epilepsy
Video

Video Airbus Adds Metal 3D Printed Parts to New Jets

By the end of this year, European aircraft manufacturing consortium Airbus plans to deliver the first of its new, extra-wide-body passenger jets, the A350-XWB. Among other technological innovations, the new plane will also incorporate metal parts made in a 3-D printer. VOA's George Putic has more.
Video

Video AIDS Conference Welcomes Exciting Developments in HIV Treatment, Prevention

Significant strides have been made in recent years toward the treatment and prevention of HIV, the virus that causes AIDS. This year, at the International AIDS Conference, the AIDS community welcomed progress on a new pill that may prevent transmission of the deadly virus. VOA’s Anita Powell reports from Melbourne, Australia.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.

AppleAndroid