OPINION: With so much of Guinea’s mineral wealth left virtually untouched, the race is on to develop the necessary infrastructure to facilitate mineral exploitation, writes Shannon Ebrahim.
The latest coup in Africa took place this week in Guinea – a country considered a treasure trove of mineral resources, much of which is yet to be exploited. The future political trajectory of the country will determine which major powers lay their hands on these critical resources.
Guinea possesses over four billion tons of untapped high-grade iron ore, a third of the world’s bauxite reserves which are used to make aluminium, undetermined amounts of uranium, manganese, nickel, significant gold and diamond reserves, and prospective oil reserves.
Aluminium is used in everything from car parts to drinks cans and home appliances. Longer-term, the metal is set to benefit from its use in electric vehicles and renewable energy. Despite this treasure trove, Guinea’s 13 million people are among the poorest in the world.
Guinea has rarely known stability since declaring independence from France in 1958, and bloody repression is entrenched. President Alpha Condé, who was overthrown in a coup this week, rose to power 11 years ago in the nation's first democratic election since independence.
Condé was outspoken against the former colonial power France, and he often said that African nations must be free and cut the umbilical cord with France. Tensions with France were exacerbated when Condé tried to sideline the French construction giant Bollore, which largely controls the port of Conakry. Condé was more in favour of Chinese construction companies and even the construction of a new Chinese port.
Colonel Mamady Doumbouya, who headed the country’s Special Forces, and who staged the coup d’etat this week, is more oriented towards France. According to local media reports, he served in the French Foreign Legion, has a French wife, and served in Afghanistan for France. It was also reported that Doumbouya took part in a US military training exercise called Flintlock, which focused on curbing terrorism.
While the coup leaders claim that they will honour the country’s business commitments, it is yet to be seen whether this opens the door to greater western, and in particular, French investment.
Both France and China have historically had a keen interest in Guinea’s mineral resources. Small exploratory missions were carried out under French colonial rule, and after independence, Chinese geologists carried out exploratory missions in the 1970s. The competition for Guinea’s rich mineral resources is still being played out today and will for years to come.
China, which is Guinea’s largest trading partner, has dramatically increased its role in the country in recent years. China understood that an export outlet to the coast had to be cleared, which would involve building 650 kms of railway, 35 bridges, and 24 km of tunnels.
In 2017, the governments of Guinea and China signed a $20 billion (about R283.2 billion) framework agreement giving Guinea potentially $1 billion per year in infrastructure projects in exchange for increased access to mineral wealth. In 2018, the Chinese Group TBEA invested $2.89 billion in the bauxite and alumina sector. The project includes the development of a bauxite mine, the construction of a port, rail road, and power plant to facilitate the supply chain. The project is estimated to generate $ 406 million in annual revenue for Guinea.
Historically, most of the country’s bauxite was exported by Compagnie des Bauxites de Guinee (CPG), which was a joint venture between the government of Guinea, the US-based Alcoa, and the Anglo-Australian firm Rio Tinto.
But more recently, a Franco-Sino-Singapore conglomerate, Societe Miniere de Boke, surpassed CBG as the largest single producer of Bauxite. China gets 55% of its bauxite from Guinea, 31% from Australia, and 14% from elsewhere. It, therefore, relies heavily on its bauxite imports from Guinea, especially at a time when relations with Australia are strained.
As for iron ore, Guinea’s famous Simandou ore, is viewed as one of the best among untapped reserves in the world. Simandou has for decades been seen by mining firms as the jewel in the crown of West Africa’s vast mineral riches.
In November 2019, the Simandou iron ore project was awarded to the WCS Chinese-Singapore-Guinean consortium. In order to improve Guinea’s electricity supply, China invested in the Souapiti dam project (valued at $2.1 billion) and in the Kaleta dam. Kaleta more than doubled Guinea’s electricity supply, and for the first time, provided the capital Conakry with reliable electricity.
China was quick to condemn this week’s coup and called for the release of President Alpha Conde. The UN, EU, AU, ECOWAS, South Africa and a number of other countries also called for the immediate release of Conde. The coup rattled global aluminium markets Monday, and prices in London notched a fresh 10-year high as investor concerns heightened over the supply of bauxite needed to produce aluminium.
With so much of Guinea’s mineral wealth left virtually untouched, the race is on to develop the necessary infrastructure to facilitate mineral exploitation.
Tenders for infrastructure projects and mining concessions will be a major scramble, but the takeover of the military places existing future plans in jeopardy. How the political dynamics play out is key, as they will have a direct impact on which foreign investors will be favoured and on the supply of key raw materials.
* Shannon Ebrahim is Independent Media Group Foreign Editor.