Guinea signed a new 106 page updated mining code into law last week. Mines Minister Mohamed Lamine Fofana said that it would root out unconscionable provisions and tone down Chinese investment in the nation.
The only trouble is that most of the mining firms in the country do not seem to appreciate the tough new law. The law allows Guinea to rights of up to 35% on all money made off their mines. It is also going to hike the export taxes paid on mineral shipments.
The mining firms operating in Guinea come from all over the globe. European, American and Chinese firms are now all protesting the new laws. United Co Rusal which is the biggest aluminum producer in the world claimed that the law was senseless.
Rusal’s statement said that any investor of good sense will look for investment opportunities somewhere outside Guinea. The Moscow based company said that the mining code adopted in Guinea increases considerably tax pressure on mining companies, making it senseless to invest in development and new projects.
The Russian company is not the only one claiming that the new laws will affect them adversely. While Rio Tinto said that the new law would cost them $10 billion, others have not openly mentioned the figures that the new law will cost them.
Bellzone Mining Plc said that these developments did not come as a surprise to them. They added that the company was committed and ready to work with the Guinea government. Others are not quite as conciliatory. Avocet Mining Plc spokesman refused to comment on the issue.
AngloGold which owns and operated the Siguiri mine said that the Societe Aurifere de Guinee already owned 15% of the mine’s stake. They added that no one had approached them from the government’s side to increase their stake in the mine.
Guinea possesses over 25 billion tonnes (metric tons) of bauxite – and perhaps up to one-half of the world's reserves. In addition, Guinea's mineral wealth includes more than 4-billion tonnes of high-grade iron ore, significant diamond and gold deposits, and undetermined quantities of uranium.