Events and Special Reports

Guinea’s Junta Urges Miners to Help Break “Resource Curse”

Guinea’s Junta Urges Miners to Help Break “Resource Curse”
Mining News Pro - Guinea’s military ruler urged miners to support the local economy, even as he reassured the industry that production would be allowed to continue unhindered following a Sept. 5 coup.

According to Mining News Pro - “The country has undisputed mining potential, but the populations remain in visible poverty,” said Colonel Mamady Doumbouya, the head of an elite army unit that overthrew President Alpha Conde. “We must work together to turn this curse into an opportunity to improve people’s living conditions,” he told miners at a meeting Thursday.

Guinea is the world’s top exporter of bauxite. The reddish ore, which has to be refined into alumina and then smelted to produce aluminum, accounts for most of the West African nation’s mining exports. Guinea vies with Australia as China’s largest supplier — and yet poverty remains endemic. Bauxite is shipped out of the country and little attempt has been made to transform it locally.

“We must accelerate the second phase of the value chain, such as the transformation of bauxite into alumina, and then into aluminum,” Doumbouya said in the speech.

The new leadership stressed that “existing regulations, contracts and investments will be respected,” said Frederic Bouzigues, general manager of Societe Miniere de Boke, the country’s biggest bauxite miner. “In return, they expect miners to respect their engagements with regards to contracts,” comply with environmental rules and continue local development work, he said by phone from the capital, Conakry.

While the coup exacerbated concerns about supply constraints that have pushed aluminum prices to the highest level in 13 years, the junta took early steps to reassure miners. It lifted a curfew in mining areas shortly after seizing power and urged companies to keep operating and kept the nation’s ports open.

“So far, every decision and measure has been in favor of the mining sector,” said Ismael Diakite, the president of Guinea’s Mining Chamber.

Key investors in Guinea, which supplies about 20% of the world’s bauxite, include United Co. Rusal of Russia and Aluminium Corp. of China Ltd.

The China-backed SMB Winning Consortium is meanwhile developing the massive Simandou iron ore project in the south of the country, which contains some of the world’s biggest untapped reserves. Production from that project is on track to begin in 2025, according to Bouzigues.

The junta’s meeting with the mining industry took place as regional heads of state held a second emergency meeting Thursday to discuss the crisis in Guinea. The regional bloc has called for the immediate release of Conde, who is still being detained by the junta, and threatened sanctions to press for a prompt return to civilian rule.

The coup in Guinea follows a second military takeover in neighboring Mali in May and an unconstitutional succession in Chad after the death of President Idriss Deby in April.

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