MAC/20: Mines and Communities

London Calling cries foul in Guinea

Published by MAC on 2009-08-03

The "cat and mouse" game between Rio Tinto - global number two iron ore producer - and the Guinean regime continues, over control of what the UK company claims is the world's biggest "undeveloped" iron ore deposit.

Guinea's mining minister says that: "A company of [Rio Tinto's] stature and size can only be good for a country that has mining ambitions such as Guinea."

But, at the same time, the regime has forced Rio Tinto to withdraw, at least for the time being, from its Simandou concession, in favour of BSRG. However, this Swiss based company is in no position to embark on  mine-related rail and port infrastructure, which is crucial for the project's success.

Rio Tinto is in a far better position to finance and complete these components; after all it's already successfuly done so in the Pilbara iron ore region of Australia, and at its Fort Dauphin mineral sands venture in southeast Madagascar.

 A devil and the deep blue sea

Whether Rio Tinto is happy at the prospect of being compelled into a working relationship with BSRG is distinctly moot. Owned by one of the world's top diamentaires, Beny Steinmetz, the eponymous company is controversial, to say the least.

BSGR operates the rich Koidu Holdings diamond concession in Sierra Leone and has been held responsible for numerous betrayals of undertakings made to local residents, culminating in bloody upheavals in December 2007 - and of continuing to do so [see Campaign for Just Mining statement below].

Moreover, BSGR was suspected of trying to broker a deal with the Guinean regime in May this year, by which Rio Tinto would be finally ousted from the country. See: http://www.minesandcommunities.org/article.php?a=9236

 

 

 

Rio exits Guinea iron-ore blocs, rival in talks

Reuters

23rd July 2009

LONDON - Rio Tinto agreed to remove equipment from two disputed iron ore concessions in Guinea awarded to private firm BSGR, which is seeking partners to develop them, Guinea's mines minister said on Thursday.

Rio, the world's second biggest iron ore producer, said it would comply on Thursday with the order by Guinea, which had threatened to shut down the firm's total operations there.

"Rio Tinto is complying with the ministerial directive and will complete the process of removing the drilling rig today," it said in a statement.

Rio declined to say whether it planned to press on with its fight against the removal of blocs 1 and 2 of the huge Simandou concession, leaving it with blocs 3 and 4.

The row with Guinea comes on top of Rio's confrontation with China over the arrest of four employees on suspicion of spying during iron ore contract negotiations.

Rio said it has spent more than $450-million on exploration at Simandou and considers it the world's largest undeveloped iron ore deposit. It had planned to spend a total of $6-billion to develop the whole concession.

Guinea's Mining Minister Mahmoud Thiam said BSGR, owned by Israeli diamond trader Beny Steinmetz, had asked the ministry to vet potential partners to develop its new concessions.

"We understand they are in advanced talks with them. Whether they develop it alone or with financial or strategic partners... to us it is not really relevant," Thiam told a conference call.

A spokesman for Beny Steinmetz Group Resources (BSGR), which hopes to become one of the world's four biggest iron ore producers, declined to comment about possible partners.

Share Infrastructure

Guinea hoped that all parties operating in the region would contribute to building the required rail and port infrastructure to cut costs and speed up the development process, Thiam added.

The two concessions were taken away from Rio by the previous government because it did not follow the mining code which required exploration and development of the entire concession, said Thiam, a former vice president of bank UBS in New York.

"I believe that if and when Rio realises that this decision is firm and irreversible, then they'll start concentrating on actually developing the site," he said.

"A company of their stature and size can only be good for a country that has mining ambitions such as Guinea."

A letter Thiam dated June 26 criticised Rio for delays in developing Simandou project and said the global miner was destabilising the West African country.

The company had previously forecast that Simandou's production would begin in 2013 at 8 million tonnes, rising to 70 million tonnes by 2018.

In the conference call, Thiam said his comments in the letter about Rio threatening civil unrest referred to the mining firm's efforts to rally local people to oppose the removal of the two concessions.

He praised Rio for its development work in the region to help build roads, schools and hospitals.

BSGR has been active in Guinea since 2006 and discovered the Zogata iron ore deposit before the government awarded it part of Rio's Simandou concession in December 2008.

The firm hopes to launch production at the Zogata mine in 2012 with 25 million tonnes of output a year and at the Simandou blocs 1 and 2 the following year, eventually ramping up that operation to 100 million tonnes a year.


POSITION PAPER ON KOIDU HOLDINGS' DRAFT RESETTLEMENT ACTION PLAN FOR THE AFFECTED COMMUNITIES IN TANKORO, KONO DISTRICT

CAMPAIGN FOR JUST MINING

C/0 29 Main Motor Road. Brookfields. Freetown. Tel (025) 204036/204035

17 July 2009

PREAMBLE

At a Roundtable Conference of CSOs working around mining and environmental issues held in Freetown on Friday 17 July 2009, and in consultation with the Affected Property Owners Association (APOA) of Kono district, we wish to express our appreciation for the bold step taken by Koidu Holdings Company (KHL) to facilitate and support the development of the long overdue Resettlement Action Plan by their local consultants, CEMMATS.

We are equally aware and appreciative of the efforts of other local structures established after the unfortunate incident of 13 December 2007 that left two people dead and others seriously injured in maintaining peace and cohesiveness in the chiefdom. Specifically, we value the significant role of the Committee for the Re-opening of Koidu Holdings, the Village Resettlement Committee and the Housing and Crop Assessment Team, as well as the leadership role of CEMMATS in all of this.

However, inasmuch as we acknowledge the fact that the draft Resettlement Action Plan makes provision to address some of the sticky issues that have been the source of conflicts and unrest, we are still very much concerned with certain aspects of the Plan. This is because there are some aspects in the Plan that have the potential to not only reverse all the gains that have been made, but also bring about a relapse into serious conflicts in the affected communities.

OUR CONCERNS

Specifically, we the CSOs are concerned over the following issues:

OUR DEMANDS

In the light of the above, we demand the following:

1. On What Koidu Holdings agrees to do in the draft Resettlement Action Plan

2. On what the community people/Project Affected persons (represented by VRC)

It is our fervent hope that the above mentioned position would be given the utmost attention and consideration for the benefit of all the stakeholders involve in particular and Sierra Leone as a nation in general

Civil society will continue to monitor the process closely and bring to the attention of the general public and the various structures established on issues that would be of concern and interest.

For more information please contact the following:

Lesli Mboka Suna Bundu Sahr Samuel Ngaujah
National Chairman Program Manager Public Relation Officer
Campaign for Just Mining Mining and Extractives, NMJD A.P.O.A
076-714661/033-752171 033-453073/078-380480 088-904027

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