Guinea’s New Mining Code: Gives Government 35% Stake, Raises Tax
By Ougna Camara – Sep 9, 2011 1:18 PM ET
Lawmakers in Guinea, the world’s biggest exporter of bauxite, adopted a new mining code that will give the West African nation a 35 percent stake in commodity companies.
“The code gives a correction to the old one for Guinea’s interests,” Mines Minister Lamine Fofana told reporters after the policy was approved by members of the National Transitional Council, the country’s legislative body. Investors will have to show feasibility studies before mining concessions are granted, Fofana said in the capital, Conakry, today. “Permit holders must work in transparency,” he said.
Guinea, whose President Alpha Conde pledged mining-sector reforms as part of his election campaign last year, holds as much as half of the world’s bauxite reserves, more than 4 billion metric tons of “high-grade” iron ore and has deposits of gold and diamonds, according to the U.S. State Department. United Co. Rusal, AngloGold Ashanti Ltd. (ANG), and Vale SA (VALE3) are among the companies that operate in Guinea.
Customs duties will be increased to 8 percent from 5.6 percent, Fofana said today. Guinea should have an increased role in bauxite sales and previous mining rights should not be challenged, according to a copy of the code handed to reporters on Aug. 31.