Conde Wants Quick Results
Mar 29, 2012 (Africa-Asia Confidential/All Africa Global Media via COMTEX) --
Officials from the China Development Bank (CDB) are offering to
finance a substantial part of the Conakry government's US$8.6 billion
overhaul of mining and industrial infratructure, according to a source
close to negotiations.
Chinese mining companies are looking at Guinea's world-class
reserves of iron ore and bauxite, and many of the proposed road, rail
and electric power projects would be financed through countertrade for
mineral exports. Since President Alpha Conde came to power in November
2010, his government has made little progress in unscrambling the many
opaque mining and infrastructure contracts set up by successive military
governments. There are fears that more countertrade agreements with
Beijing could further complicate Conakry's obligations.
The government passed its new mining code in September 2011 and is
pressing ahead with its review of all major mining contracts, but there
is still great uncertainty among the big foreign mining companies in
Guinea - Anglo-Australian Rio Tinto, Brazil's Vale and Russia's Rusal -
about the shape of the iron-ore and bauxite projects.
Committee for cooperation
Conde created the Comite de Cooperation Sino-Guineenne in July 2011
to negotiate a framework deal with the CDB. The committee has authority
to manage all cooperation issues: it comprises representatives from the
ministries of Economy and Finance, Mines and Geology, and International
Cooperation, the Agence Chargee des Grands Projets, the Banque Centrale
de la Republique de Guinee, as well as Guinea's Ambassador to China and
China's Ambassador to Guinea. On 2 March, Conde appointed his minister
in charge of strategic questions, Ousmane Kaba, to head the committee.
Prime Minister Mohamed Said Fofana and China's new Ambassador to
Conakry, Zhao Lixing, opened the 50,000-seat Stade Omnisport in Nongo on
19 January, a symbol of the burgeoning bilateral relationship. Built on
239,000 square metres at a cost of 440 mn. yuan ($50 mn.), the Nongo
stadium, according to Zhao, is 'the biggest project of its kind'.
There are only two other big Chinese buildings in Conakry: the Palais
du Peuple, the seat of parliament which was constructed during the rule
of dictator Sekou Toure (1958-1984), and the headquarters of Radio
Television Guineenne (RTG-Conakry), completed under President Lansana
Conte (1984-2008). Beijing is helping the state broadcaster switch from
analogue to digital broadcasting. The Hopital Specialise de Kipe,
located in a Conakry suburb, cost $50 million and was opened in April
2011 by Conde but isn't functioning for lack of equipment and trained
Even before the new CDB financing for the five-year plan is finalised, there is a raft of new projects under way::
- In March, Guinea selected China Geo-Engineering Corporation to
build a 385-kilometre road from Seriba to Medina Gounass to link Guinea
and Senegal. The $16 mn. project is financed by the Arab Bank for
Economic Development in Africa.
- On 16 February, China Airport Construction Corporation announced it
would build an new international airport at Maferinya, about 75 km from
Conakry. Financed by China Export-Import Bank, the new airport will be
about 12 km long and 5 km wide, said CACC Vice-President Liu Ying after
meeting Conde in February.
- On 1 February, Shanghai Construction Group started building a $65
mn. 5-star, 18-storey hotel, a few metres from the presidential palace
- China Hyway Group - which submitted a multibillion-dollar
mines-for-infrastructure deal to the military junta - is still looking
for mining permits. There are no guarantees that they will get them (AAC
Vol 3 No 12, More contracts as the vote looms & China Hyway Group's
- Chinalco (in joint venture with Rio Tinto to develop Blocks 3 and 4
of the giant Simandou iron ore project) has not seen any further
upheaval since finally accepting the government's cancellation to Blocks
1 and 2. Rio Tinto and Chinalco say they are committed to building the
Trans-Guineen Railway that will link the southeast of the country to the
west coast over some 1,000 km and at a cost of more than $3 bn. (AAC
Vol 2 No 12, Blood and money in the streets).
- China Power Investment Corporation hopes to conclude negotiations
in the coming months and get to work on $5.8 bn. in investments for a 4
mn. tonne-per-year alumina refinery at Boffa, a deepwater port at Bel
Air and a 340-megawatt power plant.l China International Water and
Electric Corporation began construction in March on the 240-MW
hydroelectric dam at Kaleta. On 4 April, the government will start work
on the $446 mn. dam, of which 75% will be financed by China.
Controversy at Forecariah
The China Power Investment project at Forecariah (AAC Vol 4 No 11,
Betting on Boffa) is the best-established in the country but also the
most controversial. It is run by the Guinea Development Corporation
(GDC), a joint venture between the China International Fund (CIF) and
the Guinean government. Part of the problem may be political: former
Mines Minister Mahmoud Thiam, who launched several controversial mining
deals under successive military regimes, has left Guinea for his base in
the United States, where he works as a director of China Sonangol, a
CIF affiliate (AAC Vol 4 No 7, Shine on you crazy diamond). Thiam played
a key role in negotiating deals for China Sonangol and CIF in
Madagascar and Angola.
The GDC was created under the military junta of Captain Moussa Dadis
Camara (December 2008-December 2009) and General Sekouba Konate
(December 2009-November 2010). In theory, GDC Mining Corporation would
have controlled the operations of other GDC companies in transport and
infrastructure relating to the joint venture with the state. However,
President Conde wanted to change the terms of GDC projects, such as the
right of refusal for all unclaimed mining permits.
'One does not know if it is truly GDC Mining that is controlling this
business,' said another official in the Mines and Geology Ministry.
Another source said the Chinese companies held only a simple mining
permit but they seemed certain to take over the project.Under's Guinea
new mining code, a mining permit does not allow a company to extract
ore. For that, a company must obtain an exploitation permit for
investments less than $1 billion or a mining concession for investments
larger than $1 bn.
'At Forecariah, this rule has not been respected and we cannot allow
the export of minerals due to the risk of setting a legal precedent,'
says an advisor to Mines Minister Mohamed Lamine Fofana. He conceded
that the government had been slow to act but added that putting the
project in a 'legal framework' was a top priority.
The Forecariah mine holds about 45 mn. tn. of iron ore, which would
guarantee the GDC a lifespan of some nine years at a rate of 5 mn. tn.
per year, as projected by CIF. Production at Forecariah began on 23
March and will generate revenues to finance the construction of the mine
at Kalia, as well as a railway and deepwater port, explains our source.
Kalia has about 4 bn. tn. of high-grade iron ore, according to Bellzone
Mining, a Jersey-registered company that operates the Forecariah mine
in a joint venture with CIF. A source close to Bellzone says that it
plans to work with CIF and GDC at Kalia.
Copyright Africa-Asia Confidential. Distributed by AllAfrica Global Media (allAfrica.com).