n Africa, military rulers agreed voluntarily to hand over power to civilians, under pressure from donors but not under force of arms. The full transfer of power in the West African nation of Guinea has to wait until elections, although a transitional government of civilians and the military is already being formed. If things go well, Guinea could be governed by a democratic administration for the first time in its history. But there might be a spoiler: Chinese interests have sealed huge mineral deals. Guinea’s path to democracy is by no means assured. There are still many in the military who wish to retain power and they will be one of the major obstacles as the country tries to break away from dictatorial rule, more than fifty years after independence from France in 1958. The competition for power will be all the fiercer as international companies jostle for control of the country’s enormous reserves of bauxite – the ore from which most aluminium is produced – and iron. World prices for both these commodities are rising steeply, increasing the stakes. Guinea also has diamonds, gold and uranium. Exploration is under way to see if its coastal waters hold oil. There is a risk investors who benefited from the military regime could back their friends, or that the proceeds from multibillion dollar investments could be siphoned-off by powerful elements of the military; a particular worry in a country where the existence of ethnic militias had been raising fear of factional fighting. Guinea is situated in a troubled region. Its West African neighbours have all gone through civil war since the late 1980s, with Liberia and Sierra Leone suffering particularly grievously at the hands of drugged-up armies including many child soldiers.
Côte d’Ivoire experienced a civil war in 2002-2003 after ethnic rivalry in its army, and is still divided between a rebelheld north and government-controlled south. Among Guinea’s investors, China – or Chinese firms – now bears the most responsibility to ensure it in no way fuels instability. Since the current military regime took power in a 2008 coup, Chinese companies have come close to taking over Guinea’s economy entirely, as other multinational investors have had property confiscated, or been paralysed by political uncertainty. Guinea’s junta took power in December 2008, after the death of Lansana Conté, its dictator of 25 years. The head of the junta, 44- year-old army Captain Moussa Dadis Camara, named himself president and followed a familiar path for African dictators. He gained popularity at first by leading a campaign against corruption, personally interrogating alleged drug traffickers on television. He promised new elections in which he would not stand, then backtracked, suggesting he would put himself forward as a candidate after all. The opposition cried foul and when it tried to demonstrate in a sports stadium, there was a massacre by the military: at least 156 killed and dozens of women raped and sexually abused, according to a United Nations report. The killings confirmed the pariah status of Guinea’s new regime. The European Union, African Union and the United States all imposed sanctions. France suspended its military aid. The UN experts’ report on the massacre recommended the International Criminal Court prosecute those responsible, singling out Camara and close aides. Then, last December, the head of the presidential guard, Lieutenant Aboubacar Toumba Diakité, shot Camara in the head at close range during an argument over who should take responsibility for the killings.
Camara was flown to Morocco for treatment and, incredibly, survived. In the meantime, however, his deputy, Sekouba Konaté, took over. It was Konaté who arranged for the powersharing government, with opposition figure Jean-Marie Doré as interim prime minister. Riches or illusion? Under Camara, Chinese companies struck a mega-deal with Guinea. A company called China International Fund has agreed to invest at least $7 billion. Under the terms of the deal, the Fund and Guinea set-up a company based in Singapore, which would hold the rights to all of the country’s oil, gas and minerals, other than those already subject to existing contracts. The joint company – the Guinea Development Corporation – is committed under the agreement to build major infrastructure projects in Guinea, including: a long-dreamt-of railway to transport the country’s unexploited iron ore reserves to the coast; a new deep-water port to export this ore; and three new hydroelectric dams, which could help power new aluminium smelters. Such projects, if carried out successfully, would transform the Guinean economy, which has more than half the world’s bauxite reserves and is the world’s largest exporter of the commodity.
Not all in Guinea are happy about the deal, however. ‘How can you believe that we could inject so much money into the Guinean economy, while the gross domestic product of the country is only $3 billion?’ Sidya Touré, an opposition leader and former prime minister, said after negotiations were opened. Referring to some of the infrastructure projects promised by China, he added: ‘Where are the cars that will be driving on these highways? Where are the trains? We must be serious. All this is illusion.’ The extent of China’s involvement in the economy goes even further, as negotiations have been opened to sell the Guinean assets of other companies to Chinese interests. These include oil exploration rights covering virtually all the coastal waters. China could also benefit from a spat over the mammoth Friguia aluminium refinery and mining complex some ninety miles northeast of the capital Conakry. In April 2008, Camara publicly lambasted a 2006 deal under which Russian firm United Company RusAl gained control of Friguia, saying RusAl had bought it from the state at well under a tenth of its true value.
A court has ruled the purchase invalid and the Minister of Mines, Mahmoud Thiam, is threatening to confiscate Friguia, unless RusAl pays out $860 million. The government says it has already opened talks with China on the sale of the mine. RusAl plans to fight its corner through international courts. The role of the Chinese state in all this is unclear. While the Chinese government denies having anything to do with the China International Fund, a Chatham House report published last year, Thirst for African Oil, suggests it may have links to the Chinese security services. Along with the China International Fund and its partners, others to have done well under the military regime include diamond billionaire Benny Steinmetz, the fifth richest person in Israel. Under former President Conté, Australian mining multinational Rio Tinto Zinc was stripped of half of its iron ore mine in Simandou, southern Guinea, and saw it handed to Steinmetz’s BSGR. When Camara was inpower, a Guinean court upheld the decision.
Rio Tinto had invested $400 million in the mine and planned to invest $10 billion more, with the aim of making it the biggest iron ore mine outside Australia and Brazil. Rio Tinto said late last year that it was trying to resolve the matter with the Guinean authorities by negotiating ‘in good faith’. Other multinationals have had problems under the military, including US mining giant Alcoa which reportedly faced official opposition when it evacuated its expatriates after the coup. Australia’s BHP Billiton appears to have put its plans for a 5.4-million-ton capacity aluminium refinery on hold until it becomes clearer what Guinea’s long-term political future will be. The China International Fund, unlike BHP Billiton and others, does not seem to regard the instability of military rule as a brake on its ambition. Far from it, the company seized on the coup to strike deals potentially giving it overwhelming control over the economy. The resources-for-infrastructure agreement mirrors other multibillion-dollar deals by Chinese interests elsewhere in Africa, including in other pariah regimes such as Zimbabwe and Sudan. As in Guinea, China’s rising demand for resources trumped any concerns over human rights violations. China’s trade with Africa has multiplied more than ten times since 2001, reaching $100 billion in 2008. It has developed tight links and shared interests with a number of the continent’s dictatorships and repressive regimes. It may be too much to hope that the Chinese communist dictatorship joins the west in supporting Guinea’s efforts to become a democracy. The question is – will its economic interests make it a spoiler?
By Daniel Balint-Kurti
