Guinea, China study mines-for-infrastructure deal

CONAKRY, July 31 - Guinea and China are discussing a deal which could see billions of dollars of Chinese investment in return for mining rights in the West African country, which has a third of the world's bauxite, a Guinean minister said. A delegation including officials from the Chinese Development Bank recently spent a week in Guinea and is due to discuss a range of investment projects with state and private sector investors back in China, he said. "The first phase has just happened in Guinea. A mission is expected to go to Beijing in the next few months to meet with the Chinese companies about the operational details of this agreement," Guinean Economy and Finance Minister Ousmane Dore told state television late on Wednesday. "On their return to Beijing, the Chinese side and Chinese authorities and companies will examine the mineral resources offered by Guinea, which could be the basis for an overall deal worth billions of dollars in investments," he said. China already agreed in January to fund a $1 billion hydropower dam in Guinea in return for rights to mine bauxite, the aluminium ore of which Guinea is already the world's top exporter. "The strategic committee has been formed ... it is a win-win partnership. The Guinean side has put forward really important projects, projects which would allow Guinea to emerge in the near future," he said. "By making bauxite and iron ore available to the Chinese, Guinea could unlock an overall sum of investment that could support these projects," he said. As well as bauxite, Guinea has significant reserves of iron ore, diamonds, gold and other minerals. Existing bauxite operations are set to expand in the coming years and an official from a national anti-poverty programme said last year that big mining projects in Guinea would bring in nearly $27 billion in investments by 2015. Guinean Mines Minister Ahmed Kante said on Tuesday that Rio Tinto's planned $6 billion Simandou iron ore mine was on track and would benefit both Guinea and the company, in an apparent effort to ease concerns over the legal status of the project. A letter sent to Rio by the secretary-general of Guinean President Lansana Conte's office in June queried the validity of a decree giving Rio access to the ore, but the mining company insisted its legal status was secure. Source: Reuters