ARC’s Leonard Mbulle-Nziege analyses recent events in Guinea…
Guinea’s latest military junta, which took power in a bloodless coup on 5 September, has lifted a curfew on mining areas in a bid to allay concern about the country’s all-important mining industry. Mining companies such as South Africa’s AngloGold Ashanti, China’s Chalco and Singapore’s TOP International Holding all reported on 7 September that they were operating normally despite the coup.
Groupement des Forces Spéciales (GPS) (special forces) commander Col. Mamady Doumbouya has taken control of the presidential palace, deposed and imprisoned President Alpha Condé (2010-2021), fired the previous government and seized their passports. In a television address on 5 September, Doumbouya dissolved the Assemblée Nationale (national assembly) and suspended the constitution. The military junta will rule through a transitional body called the Comité National du Rassemblement et du Développement (CNRD).
Despite Doumbaya’s assurances that mining sector activities will not be disrupted, the suspension of the constitution creates the risk to mining companies that the CNRD will do as previous military regimes have done, notably scrutinise, review, re-assess or attempt to tweak existing agreements in the mining sector. Mining, notably bauxite, is a significant source of exports, revenue and employment, contributing roughly 90% of export revenue and 25% of GDP. The risk of the CNRD reviewing existing agreements is likely to increase as the international community and its financing institutions respond to the coup. The longer the CNRD’s “transition” to civilian rule – the international community’s likely requirement – the higher the risk that donors will suspend funding to Guinea, increasing the pressure on the junta to raise funds at home.
There is strong precedent in Guinea for review of mining deals. Former president Condé investigated mining deals that the previous military junta leader, Captain Moussa Dadis Camara (2008-2009), ratified immediately after Camara assumed power in December 2008. The most notable outcome of these investigations was Condé’s decision to strip Brazil-based Vale S.A and Guernsey registered BSG Resources of their rights to the Simandou iron ore deposit in 2014. Doumbouya is known to have links to Mali’s new military junta and may follow its lead. In November 2020, Mali’s miltary announced a review of all mining contracts attributed during the previous presidency.
Guinea’s leading bauxite producer, Société Minière de Boké (SMB), a subsidiary of China-Singaporean consortium SMB Winning, was awarded the $15 billion concession to develop blocks 1 and 2 of the Simandou iron ore deposit in November 2019. SMB chairman Fadi Wazni is reportedly a key Condé supporter and close associate of the former president’s son, Mohamed Condé, who has served as an intermediary for various mining interests. Guinea-based civil society organisation, Colléctif pour la Transition en Guinée (CTG), has lodged a complaint in France against Condé junior and former defence minister Mohamed Diané over the “disappearance” of €171m ($201.6m) in several transactions between Condé junior, Diané, SMB and France’s Alliance Minière Responsble (AMR).
The latest military intervention brings to a humiliating end the rule of Guinea’s only president to have come to power through democratic, multi-party elections since independence from France in 1958. Despite the regressive step and the business uncertainty it brings, the intervention is not yet unpopular domestically. Alpha Condé was returned to power for an unpopular third term in October 2020, having altered the constitution to do so. His third-term electoral bid prompted mass protests in which security forces killed several people, while ten people died in post-election violence.
Events such as the routing of Senegal’s Abdoulaye Wade (2000-2012), the scuttling of Burkina Faso’s Blaise Compaoré (1987-2014) and most recently the military ouster in 2020 of Mali’s President Ibrahim Boubacar Keïta (2013-2020) show that West Africa’s voters do not tolerate engineered third terms, and sons or close relatives doing deals on the presidential coat tails. The CNRD has tapped into this disgruntlement and claims it intends to appoint a government of national unity that will include members of civil society and the opposition. Whatever the make-up of the government, businesses operating in Guinea face at least 18 months of political upset, economic decline and uncertainty.
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