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UPDATE 1-Guinea picks global advisers for mining review
March 27, 2013 / 6:01 PM / 4 years ago

UPDATE 1-Guinea picks global advisers for mining review

* Guinea picks law firms as advisers in contract review

* Says review to start soon, end by Q3 2014

* Will be case by case, will prioritise urgent projects

By Bate Felix and Saliou Samb

CONAKRY, March 27 (Reuters) - Guinea has chosen global law firm DLA Piper and three other advisers to help review and, if need be, renegotiate mining contracts signed by previous governments, the head of the review body told Reuters.

The review, pledged by President Alpha Conde after he came to power in 2010, will scrutinise contracts with companies such as BHP Billiton, Vale, Rio Tinto, RUSAL and BSGR to ensure the mineral-rich but impoverished West African nation is benefiting sufficiently from deals.

“Our objective is to point out to our partners areas in their contracts where the country is at a flagrant disadvantage, and discuss openly with them,” Nava Toure told Reuters.

“They should no longer view us as this fuming vigilante with a knife clenched in the teeth, coming to right the wrongs of the past,” said Toure, president of a technical committee reviewing 18 mining deals.

Guinea is the world’s top supplier of the aluminium ore bauxite and is also home to the Simandou iron ore deposit - the world’s largest undeveloped iron ore reserve - now held by Rio Tinto and BSGR.

Alongside DLA Piper, one of the world’s biggest law firms by revenues and number of lawyers, Guinea had picked Canadian law firm Heenan Blaikie and French firms Orrick Rambaud Martel and Gide to take part in a process now due to be completed by the third quarter of 2014.

The firms would advise the technical committee, Toure said in his downtown office in Guinea’s seaside capital, Conakry.

Guinean officials have criticised a lack of openness when the contracts were signed, particularly those agreed during the two years of military rule before Conde’s 2010 election.

The government is also overhauling the mining code, the set of laws covering how the mining industry is regulated by the state, to ensure they allow the government a fair share in resource profits.

The mining review, coupled with political instability and challenges to secure financing, have led to cuts in investment by mining groups, including BHP Billiton, Vale, Rio Tinto and RUSAL over the last year.

The reviews of contracts and the mining code are seen by some in the mining industry as part of a trend by African governments to seek more resource revenues.

BSG Resources, the mining arm of Israeli billionaire Beny Steinmetz’s business empire, has accused the government of trying to use the process to confiscate its rights to Simandou.

Other companies operating in Guinea have kept a lower profile, saying they will cooperate with the review, although BHP has said it is pulling out of the country, seeing better prospects elsewhere.

Toure said contracts would be reviewed on a case by case basis, taking into consideration the needs of investors, including companies that were trying to find financing for projects and could not afford uncertainty.

“We’ll bring forward projects that need to be dealt with speedily,” he said.

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