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

Iraqi Kurds Warn Baghdad While Moving Toward Independence Vote

Warning comes after Iraqi air raid kills four in Kurdish-held territory, and as most world leaders warn against secession More

Study: Childhood TB Rates Much Higher than Estimated

Research also presents first-ever estimate of new TB infections among children: nearly eight million in 2010 More

China Establishing New Silk Roads

Beijing officials promote creation of two new economic paths - so-called 'Silk Roads' - one a land-based road and another a maritime trade route 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.
Civilians Fear Mideast Violence Could Turn Into Full-Scale Wari
X
Zlatica Hoke
July 09, 2014 1:24 PM
Violence in the Middle East is escalating at a time when there are no new peace talks in sight. Israeli and Palestinian leaders have condemned the brutal deaths of three Israeli teenagers and one Palestinian teen, and have vowed to punish those responsible. But both sides also seem to be gearing up for more fighting. Zlatica Hoke reports.
Video

Video Civilians Fear Mideast Violence Could Turn Into Full-Scale War

Violence in the Middle East is escalating at a time when there are no new peace talks in sight. Israeli and Palestinian leaders have condemned the brutal deaths of three Israeli teenagers and one Palestinian teen, and have vowed to punish those responsible. But both sides also seem to be gearing up for more fighting. Zlatica Hoke reports.
Video

Video American Roadside Attraction 'Dinosaur Land' Lures Visitors

A big part of the American landscape of the middle 20th century was the roadside attraction - small zoos, amusement parks or quirky museums along the highways families traveled on their way to vacation destinations. Most of those attractions are gone, but one in Virginia, a couple of hours from Washington, called Dinosaur Land, is still going strong.
Video

Video Burma Football Friendly Brings Together Battlefield Opponents

As most of Myanmar’s ethnic armies maintain a fragile ceasefire with the government, some of the troops were able to let off a little steam, World Cup - style. Steve Sandford reports from Karen State, Myanmar, also known as Burma, on a peace initiative aimed at building trust between the opposing sides of one of the world’s longest-running conflicts.
Video

Video FIFA’s Football for Hope Tournament Kicks Off in Brazil

As excitement builds toward the final matches of football's (soccer's) World Cup, another competition has kicked-off in Brazil. The Football for Hope Festival brings together underprivileged young people from around the world for an event that is less about winning than about enjoying the game and one another. Scott Bobb reports from Rio de Janeiro.
Video

Video Brazil Evictions Continue Near Future Olympic Sites

Football's World Cup in Brazil is drawing to a close leaving great sporting memories. It also leaves a legacy of controversy over evictions and land dispossessions that made way for the event. The scenario is repeating itself as Brazil prepares for the 2016 Olympic Games in Rio de Janeiro. VOA’s Scott Bobb reports from a community near a future Summer Olympics site.
Video

Video More Americans Turning 100 Than Ever Before

An Arkansas woman who just celebrated her 116th birthday isn't as unusual as some might think. Gertrude Weaver -- officially the oldest living American and second-oldest person in the world -- belongs to a fast-growing segment of the U.S. population: people who are 100 years old or older. There are about 53,000 centenarians in the U.S. today. VOA's Julie Taboh shares their secrets to longevity.
Video

Video Caipirinhas Introduced to International Audience at World Cup

The hundreds of thousands of football fans visiting Brazil for the World Cup are consuming large quantities of caipirinhas, the national tipple based on muddled lime and the sugarcane-based spirit cachaça. VOA’s Brian Allen talks to some of the expert caipirinha purveyors in Rio and has this report.
Video

Video Ocean Sole: Turning Trash Into Art

From Kenya to Washington may seem a long way to travel to spread a simple environmental message. But one group from Nairobi is doing just that at the annual Smithsonian Folklife Festival. Mackenzie Buckwalter has more for VOA on their work cleaning up their nation’s coastline -- and turning discarded rubber sandals into art.

AppleAndroid