IPNews-Monrovia: It is now clear that China is about to lead an opaque tendering process for the extension of China’s African resource interests at the Simandou North iron ore project in the Republic of Guinea, which is anticipated to be shipped South to Liberia’s Buchanna sea port.
The Independent Probe Newspaper, has gathered that two shortlisted companies to lead this muti-million investment are Fortescue Metals Group (FMG), the Australian iron ore giant, and Société Minière de Boké (SMB), a Chinese state-backed vehicle that already operates one of the Guinea’s largest bauxite mines.
Verisk Maplecroft analyst Eric Humphery-Smith argues, that the workings of the tender remain “far from best practice”
According to information gathered, that an initial participation fee of this concession $300,000 which has since reduced the risk of non-development, the ‘relative sizes of the FMG and SMB bids are likely to remain unknown’, as is the reason for ruling out the third bid.
The report also states that SMB (Chinese firm) benefits from access to Chinese state financing, as well as established shipping capabilities and buyer networks in China. It’s also thought to have strong political ties in Guinea, with chairman Fadi Wazni said to be close to the president’s son Mohamed Alpha Condé.
Fadi Wazni , is the General Manager, of SMB (Chinese firm), who was recently invited on a national television talk show on the topic “Invest in Guinea”.
He goes deeply into the mining activities within the SMB/WAP (Chinese firm) consortium, but also drives into other subjects such as becoming the Honorary Consul of the Dutch Kingdom in Guinea.
“Guinea and Liberia are countries where business and politics all too often overlap, more than one tender is needed to change a deep-rooted culture,” Humphery-Smith says.
The Guinean town of Simandou is one of the world’s richest reserves of high-grade iron ore, which reduce pollution from processing with an estimated 2 billion tonnes, which Beijing needs dearly.
It may be recorded, Rio Tinto, first acquired the exploration rights at Simandou in 1997 and retains a stake in the Simandou South deposit, and has so far failed to either develop or sell the resource.
Domestic export route:
Willingness to export through Guinea, as opposed to the more commercially viable Liberian route, will be a key in determining the winner of the North tender, but that question remains, ‘what significant will the Liberian government get back in allowing the transportation of such high-grade ore to it port, Humphery-Smith questions .
It’s likely that the Liberian government will hold a minority stake in the project to ensure that the 650km trans-Guinean railway project will not be abandoned.
There are huge prospects that the railway would make smaller mineral deposits along the route more viable, and there would also be spinoffs such as passenger transport and spare capacity for cargo.
Additionally, the Chinese finance can afford to overlook short-term commercial considerations, but FMG’s preference for the Liberian export route is a further factor that’s likely to count against it.
On the other hand, China’s resource dependence on Guinea has increased in recent years. Beijing in 2017 agreed to loan Guinea $20 billion over almost 20 years in exchange for bauxite concessions. But Guinea’s population has so far seen little benefit from Chinese investment.
A classic example, riots broke up in the northwestern mining region of Boké in 2017 due to shortages of water and electricity which was suppressed by government forces, couple with SMB and other mining companies who continues to propose steps to mitigate impact on water sources through building boreholes and wells.
But according to Human Rights Watch (HRW), says the absence of public government or company data on the impact of mining on water makes it difficult to assess those responses.Bottom of Form
Already, Guinea’s government institutions still have nowhere near the personnel, resources and political will to effectively oversee mining projects, HRW says.
The bottom Line of all this, Chinese state backing and opaque politics means that dice are loaded against competing mining majors in Guinea.
It may be recorded, on July 17, Fortescue Metals Group (Fortescue), on those company reported by the government of Liberia to signing a Memorandum of Understanding (MOU) , for the upgrading of railways from the Republic of Guinean to the Port of Buchanan, in Liberia, denied categorically denied signing an MOU or agreement with the government of Liberia.
Fortescue Metals Group (Fortescue) based in Pilbara, Western Australia stated that its recent visit to Liberia was to only to discuss ‘potential economic and development opportunities’ rather than signing a formal MOU with the government of Liberia as reported.
In an email sent to the Independent Probe following an article carried a day earlier, stated that it meeting in Liberia was an introductory meeting rather than a MOU signing ceremony.
During that period, a delegation led by Fortescue Founder and Chairman Andrew Forrest AO, paid a visit to Liberia and met with the President and senior government officials to discuss potential economic and development opportunities.
“These were introductory meetings and at this stage,’ no Memorandum of Understanding or other agreements between Fortescue and the Liberian Government have been signed.’ Michael Vaughan Fortescue Metals Communication Manager wrote IPNews
Fortescue Metals Group (Fortescue) is one of the world’s largest iron ore producers with operations in the Pilbara, Western Australia, focused on the long-term sustainability of the core iron ore business, balance sheet strength and delivering returns to shareholders, as well as growth and development.
As a mining company, Fortescue has world-class exploration and infrastructure expertise and will build on our operational reputation to harness the skills and capability of our team members to drive future growth through product diversification and asset development.
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