Mining and Agriculture: Guinea Plans to Launch Stock Exchange within Two Years
19th March 2013
Updated 20 minutes ago
ABIDJAN – Resource-rich Guinea plans to launch a stock exchange within the next two years to raise financing for its struggling mining sector, a senior central bank official said on Monday.
The West African nation is already the world’s leading exporter of the aluminium ore bauxite and is seeking to develop other mining potential including the Simandou mine, one of the world’s largest untapped iron ore deposits.
“Guinea is an important mining and agricultural country … There is a financing problem. Traditional financing through the banks is no longer effective,” said Mamady Fofana, director of lending for the central bank.
“So we must find other methods both to finance these companies and for the country’s growth,” he told Reuters on the sidelines of a conference in Ivory Coast’s commercial capital, Abidjan.
Fofana said that Guinea’s government was in the process of creating a shortlist of companies to be traded on the new exchange. “We’ll start with a maximum of 10 companies, mainly from the mining sector as well as a few industrial firms and banks,” he said.
He declined to name any potential candidates.
Guinea has been plagued by political instability and corrupt leadership for much of its history since gaining independence from France in 1958. Despite its abundant mineral wealth, it remains one of the world’s poorest nations.
Economic growth has been held back by uncertainty surrounding the delay of parliamentary elections, the government said. Its economy grew by 3.9 percent last year, roughly one percentage point less than forecast.
Miners BHP Billiton, Vale and Russia’s RUSAL have begun backing away from planned investments, partly because of a government review of mining contracts.
Guinea’s government last week dismissed concerns raised over the future of Rio Tinto’s Simandou mine after the company’s CEO asked for confirmation of the state’s financial contribution to the project’s infrastructure.
Edited by: Reuters