TThe president of Guinea yesterday sought to woo further UAE investment in the African country, citing opportunities in its mining sector.
“In the mining sector, Guinea has a lot of potential that can drive growth in the economy. We are on the path to future development and looking for partners for the long term,” said Alpha Conde, speaking at Guinea’s Development Partners and Investor Conference in Abu Dhabi.
Mubadala Development, a strategic investment company owned by the Abu Dhabi Government, has already invested in Guinea's bauxite reserves.
Last November, Mubadala and the Compagnie des Bauxites de Guinée (CBG) agreed on a long-term bauxite supply deal. The ore is used in aluminium production.
The deal was designed to help Emirates Global Aluminium (EGA) source for materials. EGA is a metal producer that Mubadala jointly owns with Investment Corporation of Dubai.
Waleed Al Muhairi, Mubadala’s chief operating officer, spoke of the similarities between the UAE and Guinea.
Both are bestowed with a wealth of natural resources – the UAE with oil and Guinea with minerals; but both countries are striving to diversify their economy.
“One of the things we are proud to be is a partner with Guinea as we look at how we can prosper in a natural-resource-rich environment,” Mr Al Muhairi said.
The event comes as Guinea looks to tap its vast mineral wealth, estimated at more than 25 billion tonnes of bauxite and more than 4 billion tonnes of iron ore.
Officials hope the development of the sector can cut unemployment, estimated at 60 per cent among youths, and help to stamp out poverty.
Mr Conde said some of the biggest opportunities were in iron ore exploitation. He said: “Iron ore reserves will, for the long-term, be considered the most important mining sector.”
In November 2011, Mubadala and the government of Guinea signed agreements that covered a commitment to explore partnerships and investments in bauxite, alumina and iron ore.
In a move that strengthened Abu Dhabi’s foothold in Guinea’s bauxite reserves, Mubadala and Dubai Aluminium (Dubal) in May completed the full acquisition of Guinea Alumina, purchasing the remaining stake from former joint venture partners BHP Billiton and Global Alumina.
Guinea Alumina, holds a 50-year mining concession at the Global Alumina Sangaredi Refinery Project, which includes a mine and a refinery with a planned annual output capacity of 3.6 million tonnes.
Many of the world’s other large minerals and mining producers are also based in Guinea.
But the further development of the sector has been overshadowed by the dispute between the Israeli billionaire Beny Steinmetz and the Guinea government over an iron ore licence.
BSG Resources (BSGR), the mining arm of Mr Steinmetz’s business operations, is alleged to have bribed officials to win a contract in 2008 to mine the northern part of the Simandou mountain, which is said to have the globe’s largest untapped iron ore deposit. BSGR claims it is innocent.
The dispute is unnerving other investors in the mining industry.
Xiong Weiping, the president of Chinese aluminium producer Chinalco, said: “In order to improve investment environment, the following things could be done by the government: give more stability and help the investor to protect the mining rights and to make sure they can enjoy what they have invested in the country.”
Chinalco entered Guinea in 2010 through a joint venture with the miner Rio Tinto.