Bissau government to review Angola Bauxite deal, calls it unfair

BISSAU Thu Aug 23, 2012 12:05pm EDT

BISSAU Aug 23 (Reuters) - Guinea-Bissau's transitional government said it will renegotiate a deal with Angola Bauxite as the current agreement, signed by a government ousted in an April coup, is unfair.

Angola Bauxite, part-owned by the Angolan state, first signed a $500 million plan to build a mine and deepwater port in Guinea-Bissau in 2007 to handle bauxite, the ore from which aluminium is made. Progress has been slow due to political uncertainty.

A coup in April derailed elections that former prime minister Carlos Gomes Junior looked set to win. An interim administration has since been put in place in the West African country, despite calls by some nations that the former government should be reinstated.

"The agreement signed in 2007 by the government of Carlos Gomes Junior is not fair .. As a result, the terms of the agreement must be reviewed," government spokesman Fernando Vaz said on Thursday after a meeting with an Angola Bauxite delegation.

"The transitional government will not accept that Bissau receives 10 percent (of revenues) while Angola Bauxite takes 90 percent," Vaz added.

An official at Angola Bauxite, which had sent a delegation to Bissau to discuss restarting the project, was not immediately available for comment.

Just before the coup, officials said that the project had stalled, with little work completed since the official inauguration in July 2011, due to political instability and a delayed environmental impact study.

The project is due to create a deepwater port at Buba with a capacity of three 70-tonne vessels simultaneously, and a 3-million tonne per year mine in Boe, 240 km (149 miles) southwest of Bissau. (Reporting by Alberto Dabo; Writing by David Lewis; Editing by Richard Valdmanis and Anthony Barker)