Australian mining giant Rio Tinto is seeking international intervention after the company lost the mining rights to two exploration blocks in Guinea and could lose its remaining two if it does not hand over its mining plans to the government.
Rio Tinto lost the rights to the two blocks in Simandou for iron ore in 2008 and the security of tenure of the remaining two was subject to a feasibility study and project schedule, the Guinea government told Branch Iron Ores, Rio Tinto’s representative company in Guinea.
A Rio Tinto spokesperson told the Mail & Guardian: “We seek a productive two-way dialogue to resolve the disagreement between us and the government of Guinea about important issues of title.”
The company has appealed to the World Bank to intervene but planned meetings between the mining company and the government have not taken place.
A letter from the office of Prime Minister Jean Marie Dore reveals that the remaining two concessions are not safe. “The transitional government will no longer tolerate the freezing of its resources by mining companies to satisfy their strategy policy in the coming years. In this regard it will take any measures necessary to put an end to this situation,” the letter says.
“If the feasibility studies are not submitted to the government, we will proceed to the evaluation of the permits and take the measures required in accordance with the legislation in force.”
The exploration rights
Sources with knowledge of the issue said that the mining company feared that once the project schedule and feasibility studies had been obtained by the government, the exploration rights could be revoked.
A mining company usually explores the feasibility of mining in an area before getting a full mining licence. These studies show the extent of the deposits and whether it would be worthwhile to exploit them.
One source said: “They can then simply take the plans and be able to give it to another mining company, who will pay top dollar for it.”
In 2008, when the rights to the first two blocks were revoked, they were transferred to Benny Steinmetz Group (BSG) Resources, which reportedly has close ties to the Guinean mining minister, Mahmoud Thiam.
In an increasingly common “grab-and-flip” strategy, he transferred the rights, claiming that Rio Tinto, which had been exploring the area for seven years, had taken too long to develop the project, according to a letter by the then general secretary to the president to Rio Tinto’s affiliate in Guinea.
High on the list
With the recent presidential elections in Guinea, mining was a rallying point for civil society.
“We are the world’s second-largest bauxite producer, we have iron ore reserves envied by everybody, we have gold, diamonds, oil, etcetera. But we vegetate in misery. We lack even water and electricity,” said Mamadou Taran Diallo, the president of the Guinean coalition, Publish What You Pay.
“This is a battle. It has to be fought and won this time,” he said in remarks aimed at the two candidates, former prime minister Cellou Dalein Diallo and veteran opposition figure, Alpha Conde, reports News24.
By the time of going to press the results had not been announced.