[miningmx.com] — GUINEA is launching a comprehensive review of mining contracts to root out ‘unconscionable provisions’ granted by previous administrations in the West African state, Mines Minister Mohamed Lamine Fofana told Reuters.
The move comes after the country, the world’s top supplier of the aluminum ore bauxite whose iron ore reserves have drawn billions of dollars in investments, passed a new mining code that more than doubles state share in projects.
“If by defending the interests of the country people think we are being protectionist, well then I agree,” Fofana told Reuters in an interview late on Monday.
“Now I plan to clean up the mining sector and will conduct a review to remove unconscionable provisions in certain contracts and ensure we have balance and fairness,” he said.
Guinea held its first free elections late last year bringing President Alpha Conde to power and ending nearly two years of military rule during which authorities signed several high-profile mining accords.
Fofana said that the government had overturned an agreement by the military government to give China International Fund the right of first refusal on all of Guinea’s unexploited resources — a deal reportedly worth some $7bn.
“CIF will be treated like any other company,” he said, adding CIF would be able to retain current licences.
Fofana also said that he expects a deal with Russian mining giant RUSAL over a range of disputes – from back taxes to compensation for alleged pollution at the port of Conakry – by the end of the year.
He said RUSAL’s Dian Dian bauxite project was “on the table,” but gave no further details.
“As of today, the president prefers bilateral discussions that are friendly and can produce a happy outcome,” Fofana said. “We expect this to be resolved by the end of the year.
Guinea lawmakers passed a new mining code last week that gives the state a free 15% stake in all the country’s mining projects along with an option for an additional paying 20% stake.
Guinea’s previous mining code, from 1995, had secured the state only a 15 percent stake in some projects.
Fofana said the 1995 code had succeeded in drawing investors into some “mega-projects” but that it did not satisfy the needs of the state.
He said he would push for the big projects – including developments by Anglo-Australian mining giant Rio Tinto, Brazil’s Vale, and London-listed Bellzone Mining iron ore developments – to begin producing as soon as possible.
“The freezing of Guinea’s resources is over,” he said.
