Guinea may seek larger stake in mines

Guinea’s new president, Alpha Conde, has said the West African country's government may seek larger state ownership instead of reviewing existing mining contracts.

President Conde told reporters in Burkina Faso that the incoming government would not seek to “renegotiate contracts” but rather define a new mining policy where Guinea will own a one-third interest in the country's mines. The current mining policy requires a minimum of 15% state interest.

Some of Africa’s biggest projects by cost are planned for the country, according to the Raw Materials Group, which puts Rio Tinto plc’s Simandou and Bellzone Mining plc’s Kalia iron-ore projects as the top two projects on the continent by construction cost.

Bellzone responded, saying that it has not had any notification that its projects will be subject to any changes. With regard to Kalia, the company has a 'mining convention', which was passed into Guinea law through a Presidential Decree signed last year.
Nik Zuks, Bellzone’s managing director, said: "We believe that our convention is fair and provides an equitable split of economic benefits to Guinea and our investors.

He added: “With any change in government it can be expected that there will be a review of revenues and expenditures, and operator adherence to their licence conditions.”

The convention is subject to an economic stabilisation clause. This exempts Bellzone from increases that may be promulgated, according to the company, but allows it to apply for benefits that may become available through changes.