The $25M Guinea Mining Deal Caper: Is Soros Really Sore with Conde?
In the good old days, George Soros and Alpha Conde smile as they begin their collaboration on revision of the Guinean mining code. After the $25M loan sleight-of-hand between Guinea and South Africa, Soros is trying to do some damage control. And Conde? Right about now, he should be departing Thailand and heading for Malaysia working on his “Prezi” image.
George Soros, one of the richest people in the world and adviser to Guinea’s Alpha Conde on mining issues, is doing a little damage control over a nasty mining deal (see below) that makes the lenders look like loan sharks and makes the borrower, the Guinean government, look like it is drawing up plans for a new ministry – ”Corrupt Mining Deals ‘R Us.”
As the story goes, a $25 million loan was made to Guinea last year by a South African businessman, Walter Henning. But the terms for the lender show that Henning’s company, Palladino, would be entitled to a 30 percent stake in the new company and could result in a huge discount should Guinea default on the loan. Even more chilling is a term which allows Palladino to take 15% of every mine in the country!
A few days ago, Soros called for Guinea to investigate the issue of the $25 million loan (Soros can’t be serious) because many accounting questions remain. The Guinean government has decided to punt and pull the deal altogether because it didn’t appear to be a profitable arrangement!
Soros would probably like to tear Conde’s head off for getting caught in such a messy deal that is anything but a deal for the people of Guinea. In addition to keeping an eye on further statements from Soros, one should keep an even closer watch on Iraq war crimes violator, Tony Blair, who, through the Africa Governance Initiative, is mucking around in Guinea’s kafkaesque world of mining.
Saturday 23 June 2012
Mineral-rich Guinea is scrapping a controversial mining deal after fears it represented bad value for the country’s valuable assets, keenly in demand from the likes of Rio Tinto and Brazil’s Vale.
The controversy surrounds a $25m (£16m) loan made to the African state in April last year to set up a new national mining company. It was arranged by Walter Hennig, a South African-based businessman who has traded diamonds in Africa.
A fierce debate has raged in recent weeks about whether the terms of the loan entitle Mr Hennig’s Palladino vehicle to take a 30 per cent stake in the new company, at what would effectively be a massive discount, in the event of a default. This could potentially be worth billions of pounds because the company has the right to take 15 per cent of every mine in the country free of charge.
Eric Joyce, the Labour MP, is among those who believe the loan could allow Mr Hennig to amass a huge cut-price stake in Guinea’s mineral industry. George Soros, the billionaire investor, has called on Guinea to investigate the loan.
“There are legitimate questions concerning this loan that call for examination and accounting.” Mr Soros wrote to Mr Joyce yesterday. However, Mr Soros does not agree that Mr Hennig is in line for a 30 per cent stake in the event of a default.
The government last night said it had effectively pulled the deal “because the terms of the loan are no longer favourable from a commercial standpoint.”
Palladino has denied a default could result in it scooping up “30 per cent of private or national assets worth billions of dollars.”
Palladino has said: “Such repayment cannot legally exceed the value of the debt due under the loan agreement and it can in no way result in the appropriation by our company of 30 per cent of private or national assets worth billions of dollars.”
Tony Blair’s Africa Governance Initiative foundation has been monitoring Guinea’s overhaul of its mining industry.