The nation of Guinea in West Africa is the world’s leading exporter of bauxite, holds more than 4 billion metric tons of high-grade iron ore, and has gold and diamond deposits according to the U.S. State Department. Companies like AngloGold Ashanti Ltd. and Vale SA have mining operations in Guinea, but will now have to comply with the country’s new mining code.
The protectionist new mining code in Guinea will give the nation a 35 percent stake in all commodity companies operating in the country. “The code gives a correction to the old one for Guinea’s interests,” says Mines Minister Lamine Fofana. “Permit holders must work in transparency.”
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Guinea’s President Alpha Conde pledged mining-sector reforms in his 2010 campaign. In fulfilling his promise to voters he is also increasing customs duties to 8 percent from 5.6 percent prior.
Guinea holds as much as half of the world’s bauxite reserves. Considering that the mineral is the primary source for the manufacture of aluminum, the country’s newfound protectionist stance on its mining operations may see an influx of public money that will ultimately help boost the African nation’s economy if the funds are allocated fairly to its people.
