CAPE TOWN Feb 4 Guinea will review all of its
mining contracts including a 2011 settlement agreement with
global miner Rio Tinto, as it conducts an audit of its
mining registry, Mines Minister Mohamed Lamine Fofana said on
Guinean President Alpha Conde came to power in 2010
promising to strengthen the impoverished West African nation's
The government has since moved to overhaul the mining code
and has set up a technical committee to review existing natural
resources contracts, particularly those signed during the
2008-2010 period when the country was ruled by a military junta.
Rio Tinto initially controlled all of the Simandou resource,
one of the largest untapped iron ore deposits in the world.
The Guinea government ousted it from the northern part of
the Simandou deposit in 2008. Under a 2011 settlement the
company secured permission to mine the southern half after
agreeing to pay $700 million and give the government the right
to up to 35 percent.
Fofana said the 2011 deal and its integration with previous
agreements was under review.
"This accord has to be integrated with the initial framework
agreement. To do that, we need to have discussions, and this is
what the committee are doing, in order to make the necessary
changes to the framework agreement," Fofana told Reuters on the
sidelines of an African mining conference.
Fofana said there were "constant discussions" with Rio. The
company was not immediately available to comment.
Guinean officials said last year that the review would focus
on three of the largest contracts, including a deal signed by
BSG Resources (BSGR) - part of billionaire Beny Steinmetz's
business empire - to obtain the northern half of the Simandou
That project was put on hold last year as BSGR partner Vale
cited uncertainties in regulation. Worries over the
government's intentions have prompted BSGR to say it would
consider all legal options to avoid expropriation.
The minister denied BSGR was being targeted.
"I do not understand why BSGR is stigmatised. For us, they
are like any other mining project developing in Guinea."
"We do not discriminate, we do not differentiate between
BSGR and any other company. The review concerns all companies
... there are no exceptions," Fofana said.
Guinea officials have said they expect to complete the
review of the BSGR contract in the first quarter, but Fofana
declined to comment on the timing or a potential outcome.
"We need to wait for the outcome of the review. For now,
there has only been an exchange of documents," he said, denying
there had already been offers to seek alternative investors.
The government is separately in talks to seek financing for
its portion of the infrastructure associated with Rio's portion
of Simandou. Fofana said there were "fruitful" contacts with
financing institutions, but declined to comment further.