2023-08-18 17:00:36
It was one of the first acts of Mamadi Doumbouya after his coup d’etat of September 5, 2021 against President Alpha Condé, elected in 2010, but guilty of having wanted to serve too many terms by wiping his feet on the Guinean Constitution. Only a few days after his putsch, the former member of the French legion had brought together all the miners, young and old, present in the country to deliver a double message to them. Firstly, it guaranteed the sustainability of the mining agreements granted until then, within the limits of their legal compliance, of course. Secondly, he enjoined them to respect their commitments in terms of production and fiscal and environmental respect under penalty of losing the permits granted.
“And, indeed, the worst did not happen, they did not go back on the mining conventions”, recognizes Fadi Wazni. In saying this, the boss of the Guinean group United Mining Supply (UMS), present for years in the bauxite sector, thinks of Simandou. “The Iron Mountain” forms the world’s largest identified reserve of iron ore, still untapped and estimated at 2.4 billion tons. Either “enough to build 500,000 Eiffel Towers”calculated Jim Wormington, senior researcher at the human rights organization Human Rights Watch and author ofa report on the environmental risks of the project.
Lost 800 km from Conakry on the southwestern borders of the country bordering Liberia, Sierra Leone and Côte d’Ivoire, the mountain has fueled the fantasies of miners and Guinean authorities for several decades. But the Simandou project also threatens nearby communities’ access to land and water, and will release large amounts of carbon into the atmosphere. “The Simandou project is unprecedented for Guinea, not only in its size and complexity, but also in the threat it poses to the rights and environment of local communities,” warns the researcher. “Inadequate project oversight could have catastrophic effects on human rights and the environment”he adds.
Thunderous entrance
The alert is not useless in view of recent years. In the space of ten years, Guinea has made a thunderous entry into the global mining landscape, propelled to the top by the explosion of its bauxite production. This small West African country, which has one of the worst human development indices, relegated Australia to second place in the ranking of world exporters of this sedimentary rock essential for aluminum production in 2022. Chinese industry absorbs most of the 100 million tonnes extracted each year (against 17 million in 2015) in Guinea. But Simandou and his billions of tons of iron ore is about to upset the Guinean economy even more profoundly.
At the height of its colossal potential, the “iron mountain” has also generated a lot of dirty tricks according to the greed of some of the most powerful miners in the world. The judicial soap opera of Beny Steinmetz attests to this. On April 15, 2023, the Geneva Appeals Chamber confirmed the sentence – to three years in prison, including eighteen months, and a fine of 50 million euros – of the Franco-Swiss businessman -Israeli, who made his fortune in the diamond sector, for bribing foreign public officials.
He was accused of having paid 10 million dollars (9.2 million euros) in bribes in 2006 to one of the wives of the Guinean president at the time, Lansana Conté (head of state from 1984 until his death on December 22, 2008) to obtain, at a low price, mining rights on Simandou. By this maneuver, he ousted Rio Tinto, one of the world leaders in the sector before selling his assets to the Brazilian group Vale – another mining juggernaut – and pocketing in the process a staggering capital gain of several billion dollars.
The election of Alpha Condé to the Guinean presidency in 2010 launched a process of overhauling the titanic project which, in addition to the mining activity concentrated on four mining blocks, includes the construction of the Transguinéen. That is 679 km of railways in this landlocked region starting from the deposit in the mountains to the Atlantic Ocean and the ore port of Matakong (south). This structuring project for the Guinean economy, valued at 14 billion dollars, should ultimately result in a 5% growth gain in GDP.
Twists
But it was not until the coup d’etat that the work really started. Mamadi Doumbouya has in fact multiplied his chins and threats to incite the concession holders to action and defend the country’s interests. Two actors share the four blocks open to exploitation. Namely for blocks 1 and 2, the WCS consortium, already present in Guinea in the bauxite sector, formed by the Guinean group, mentioned above, UMS, the Singaporean Winning Shipping and the Chinese Shandong Weiqiao. The rights for Blocks 3 and 4 are held by Rio Rinto Simfer (a subsidiary of Rio Tinto).
After freezing all activity on the mine, the junta considered it appropriate to force the two groups to join forces within the Compagnie du Transguinéen (CTG), created in July 2022, for the construction of the railway. Colonel Mamadi Doumbouya also obtained the free concession to Guinea of 15% of CTG shares. This railway infrastructure, built mainly by WCS, will also be used by Rio Tinto for the transport of minerals. It will also be available for the transport of other goods produced along the line and open to the transport of passengers. Eventually, the train and the port, also built by WCS, should be handed over to the State. An interministerial follow-up committee, headed by Djiba Diakité, chief of staff to the head of the junta, assisted by foreign law firms has also been set up.
Despite all these twists and turns, the project finally came out of limbo and convinced the most skeptical of its reality. “All the bridges and tunnels of the Transguinéen have been built”, tells us a very good source subject to the rules of confidentiality. However, it observes that the creation of the CTG associating Rio Tinto, WCS and the Guinean State, sealed by the signing of a shareholders’ agreement on March 8, 2023, “makes decision-making more difficult and therefore slows down the work”. The schedule setting the end of the work and the start of production at the end of 2024 will undoubtedly be difficult to keep and could well slip by a few months.
“Slow Economy”
Especially since Rio Tinto is not advancing at the same pace as WCS. “They always show a certain lukewarmness and a kind of wait-and-see attitude”confided to us a businessman familiar with the matter. “Rio Tinto is old-fashioned capitalism, he adds. Its long history is not exempt from social or environmental scandals, but a putschist regime undoubtedly sends a bad image to the group’s shareholders and calls for caution. »
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Founded in 1873, Rio Tinto is one of the largest mining groups in the world. Its assets are concentrated primarily in Australia and Canada. Iron represents 28% of its turnover. “The Guinean legislative corpus is too modest, the Mining Code does not exceed a hundred pages. For some investors this is not very reassuring”, underlines our source. Without forgetting the weakness of the institutions which places Guinea still far from a rule of law.
However, the Simandou farm has never seemed so close. The question of the benefits for the population will remain. Experience from bauxite calls for the greatest caution. The damage caused to the environment by the unbridled extraction of deposits in the Boké region (north) is considerable. Pollution of the air by dust, groundwater and rivers, displacement of populations… “Never has mining activity prospered so much”, slips a large Lebanese trader supplier of spare parts for this industry. On the other hand, the population does not really benefit from this activity which is not very intensive in terms of human capital. “Retail sales for individuals have collapsed, halving since the coup. The whole economy is idling except construction and mining”he slips.
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