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

Turkish Public Fears Jihadists More Than Kurds

Turkey facing twin threats of terrorism by Islamic State and PKK Kurdish separatists, says President Erdogan’s ruling AK Party More

Video One Year After Massacre, Iraq’s Yazidis a Broken People

Minority community still recovering from devastating assault by IS militants which spurred massive outrage More

‘Malvertisements’ Undermine Internet Trust

Hackers increasingly prey on users' trust of major websites to delivery malicious software 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.
Iraqi Yazidis Fear Death of Their Communityi
X
Sharon Behn
August 03, 2015 2:23 PM
A year ago on August 3, Islamic State militants stormed the homelands of Iraq’s Yazidi minority, killing hundreds of men and enslaving thousands of women. The scenes of desperate Yazidi families crowding on the top of Sinjar mountain without food or water spurred Kurdish fighters into action, an emergency airlift and the start of the U.S. airstrike campaign against the Islamic State Sunni extremists. VOA's Sharon Benh reports from northern Iraq.
Video

Video Iraqi Yazidis Fear Death of Their Community

A year ago on August 3, Islamic State militants stormed the homelands of Iraq’s Yazidi minority, killing hundreds of men and enslaving thousands of women. The scenes of desperate Yazidi families crowding on the top of Sinjar mountain without food or water spurred Kurdish fighters into action, an emergency airlift and the start of the U.S. airstrike campaign against the Islamic State Sunni extremists. VOA's Sharon Benh reports from northern Iraq.
Video

Video Bangkok Warned It Soon Could Be Submerged

Italy's Venice and America's New Orleans are not the only cities gradually submerging. The nearly ten million residents of the Bangkok urban area now must confront warnings the city could become uninhabitable in a few decades. VOA Correspondent Steve Herman reports from the Thai capital.
Video

Video Inclusive Gym Gets People With Disabilities in Fitness Spirit

Individuals with special needs are 58 percent more likely to be obese than the general population. According to the U.S. Centers for Disease Control, they also have an increased likelihood of anxiety, depression and social isolation. But a sports club outside Washington wants to make a difference in these people's lives. With Carol Pearson narrating, VOA's June Soh reports.
Video

Video Astronauts Train Underwater for Deep Space Missions

Manned deep space missions are still a long way off, but space agencies are already testing procedures, equipment and human stamina for operations in extreme environment conditions. Small groups of astronauts take turns in spending days in an underwater lab, off Florida’s southern coast, simulating future missions to some remote world. VOA’s George Putic reports.
Video

Video Special Olympics Show Competitors' Skill, Determination

Special Olympics competitions will wrap up Saturday in Los Angeles, and the closing ceremony for athletes with intellectual disabilities will be held Sunday night. In a week of competition, athletes have shown what they can do through skill and determination. VOA's Mike O'Sullivan reports.
Video

Video Civil Rights Leaders Struggled to Achieve Voting Rights Act

Fifty years ago, lawmakers approved, and U.S. President Lyndon Johnson signed, the Voting Rights Act of 1965. The measure outlawed racial discrimination in voting, giving millions of blacks in many parts of the southern United States federal enforcement of the right to vote. Correspondent Chris Simkins introduces us to some civil rights leaders who were on the front lines in the struggle for voting rights.
Video

Video Shooter’s Grill: Serving Food with a Touch of the Second Amendment

Shooter's Grill, a restaurant in Rifle, Colorado, attracts visitors from all over the world as well as local patrons. The reason? Waitresses openly carry loaded firearms as they serve food, and customers are welcome to carry them, too. VOA's Enming Liu and Lin Yang paid a visit to Shooter's Grill, and heard different opinions about this unique establishment.
Video

Video Despite Controversy, Business Owner Continues Sale of Confederate Flags

At Cooter’s, a store in rural Sperryville, Virginia, about 120 kilometers west of Washington, D.C., Confederate flags are flying off the shelves. The red, white and blue battle flag, with 13 white stars representing the Confederate states, was carried by southern forces during the U.S. Civil War in the 1860s. The South had seceded from the Union over several key issues of disagreement, including slavery. VOA’s Deborah Block has the story.
Video

Video Booming London Property a ‘Haven for Dirty Money’

Billions of dollars of so-called ‘dirty money’ from the proceeds of crime - especially from Russia - are being laundered through the London property market, according to anti-corruption activists. As Henry Ridgwell reports from the British capital, the government has pledged to crack down on the practice.
Video

Video Hometown of Boy Scouts of America Founder Reacts to Gay Leader Decision

Ottawa, Illinois, is the hometown of W.D. Boyce, who founded the Boy Scouts of America in 1910. In Ottawa, where Scouting remains an important part of the legacy of the community, the end of the organization's ban on openly gay adult leaders was seen as inevitable. VOA's Kane Farabaugh reports.

VOA Blogs