Identifier
Created
Classification
Origin
09CONAKRY479
2009-08-17 16:38:00
CONFIDENTIAL
Embassy Conakry
Cable title:  

GUINEA'S LARGEST DIAMOND MINE SOLD TO CNDD MEMBER

Tags:  EMIN ECON EINV PGOV PREL GV 
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VZCZCXRO4473
RR RUEHPA
DE RUEHRY #0479/01 2291638
ZNY CCCCC ZZH
R 171638Z AUG 09
FM AMEMBASSY CONAKRY
TO RUEHC/SECSTATE WASHDC 3931
INFO RUEHZK/ECOWAS COLLECTIVE
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHINGTON DC
RHMFISS/HQ USAFRICOM STUTTGART GE
C O N F I D E N T I A L SECTION 01 OF 02 CONAKRY 000479 

SIPDIS
SENSITIVE

E.O. 12958: DECL: 03/16/2019
TAGS: EMIN ECON EINV PGOV PREL GV
SUBJECT: GUINEA'S LARGEST DIAMOND MINE SOLD TO CNDD MEMBER

Classified By: ECONOFF BRIANA WARNER FOR REASONS 1.4 (B) AND (D)

C O N F I D E N T I A L SECTION 01 OF 02 CONAKRY 000479

SIPDIS
SENSITIVE

E.O. 12958: DECL: 03/16/2019
TAGS: EMIN ECON EINV PGOV PREL GV
SUBJECT: GUINEA'S LARGEST DIAMOND MINE SOLD TO CNDD MEMBER

Classified By: ECONOFF BRIANA WARNER FOR REASONS 1.4 (B) AND (D)


1. (C) Summary: EconOff met with Bouna Keita, the new
proprietor of the largest diamond mine in Guinea and a
staunch member of the CNDD, to discuss his recent mining
acquisition. In the meeting, Keita detailed the opaque
"bidding" process for the diamond mine and discussed his
opinions about the political situation. According to Bouna,
Guinea's political and economic stability is improving under
Dadis, leadership. As for his mining operation, Keita may
lack the capital and experience to turn it into a success.
END SUMMARY.


--------------
BACKGROUND
--------------



2. (U) The Canadian operator of Guinea's only industrial
diamond mine, the Association pour la Recherche et
l,Exploitation de Diamants et de l,Or (AREDOR),suspended
operations in 2006 due to financial difficulties and fraud
accusations. The largest diamond mine in Guinea, AREDOR
employed nearly 130 local employees and 20 foreign advisors
and produced approximately 32,600 carats of diamonds in 2003.
The GOG officially revoked AREDOR,s permit in early December

2008. On July 29, 2009, Bouna Keita and his Swedish partner
Victor Kubiak, were awarded the concession "on order of the
Head of State."


--------------
PRESIDENTIAL CANDIDATE TO DIAMOND MOGUL
--------------



3. (C) Well known because of his highly publicized business
transactions and his failed candidacy for President in 1996,
Bouna formed Batax Bouna International Mining Corporation
(Batax) one month after the December coup. Bouna was one of
the economic operators in the country to actively support
Dadis and the CNDD immediately after the coup, and has
reportedly become extremely close with the CNDD president.



4. (C) Bouna came to the Embassy on Aug. 12 to discuss his
recent diamond acquisition with EconOff. Upon arrival, Bouna
and his heavily armed Red Beret driver demanded that they be
allowed to enter the compound as a VIP. When an Embassy guard

refused to let the car pass, Bouna apparently became visibly
angry and demanded that as a "Presidential Advisor," he be
given special treatment. (Note: According to RSO, the guard
was visibly scared after the altercation and feared
retaliation by the Red Beret driver. END NOTE)



5. (C) During the meeting, Bouna was extremely supportive of
the CNDD and optimistic about the prospects for his new
diamond mine. According to Bouna, the contract was awarded to
him by Dadis himself. He and one other prospective buyer were
apparently invited by Dadis to discuss their bids.,
Reportedly Dadis said that whichever company was willing to
pay salary arrears for the 130 unemployed workers would be
awarded the concession. Bouna supposedly promised to pay
nearly $1.8 million USD to the formerly unemployed workers as
well as hire them all to work on the site. As such, Dadis
pronounced him the winner of the contract. (COMMENT: Bouna
has a reputation as someone prone to exaggeration and
self-promotion. END COMMENT)



6. (C) When asked about when diamond operations would
commence, Bouna smiled and said that he was already exporting
from his site. To prove it, Bouna pulled a large bag of cut
and polished diamonds out of his suit coat pocket and spilled
them out onto the table to show EconLES and EconOff. He said
that he had pulled them from the site that very morning, and
was heading to Camp Alpha Yaya with them that day. When
EconOff inquired about how a diamond could be mined, cut, and
polished in the same day in a country where there are few
refining facilities, Bouna declared that his organization was
sophisticated enough to make this happen.



7. (C) When asked about funding for his new mine, Bouna
confessed that he doesn't presently have the capital
available to finance mining operations. As such, he said that
he was searching for loans from international banks and

CONAKRY 00000479 002 OF 002


trying to create a board of shareholders. He said, at the
moment, that he had no concrete plan for large-scale
extraction or finance for new machinery. According to media
reports, as well as Bouna,s statements, Batax paid a $30
million USD fee to the government for the concession.


--------------
DIAMOND MOGUL TO WELL-CONNECTED POLITICIAN
--------------



8. (C) Bouna went on to boast about his "extremely close
personal relationship with the President" and said that he
has become something of a presidential advisor to the junta
leader. He said that he was heading over to Camp Alpha Yaya
directly after the Embassy meeting to discuss the firing of
several ministers with whom Dadis was displeased. When asked
about how the concession process could be fair in light of
Bouna,s close relationship with Dadis, Bouna said that Dadis
is "incorruptible" and "wants to do only what is best for the
country."



9. (C) He then asked why there weren't more American
businesses operating in Guinea. He told EconOff that he was
"tired of working with the Chinese." When EconOff explained
that the commercial situation in Guinea is unstable due to
corruption, mismanagement, ever-changing investment codes,
and insecurity of negotiated contracts, Bouna acted surprised
and scoffed. He told EconOff that he would discuss these
problems with Dadis immediately and remedy the situation.



10. (C) Bouna told EconOff that Dadis has taken a great deal
of interest in improving social and economic services. He
said that anyone who speaks badly of Dadis and pushes for
elections isn't listening to Guinea's population. "We (the
CNDD) have the support of the entire country," he said.
According to Bouna, the international community is imposing
elections on Guinea which shouldn't have to happen this year.
When asked if he would be running for President in the
upcoming election, Bouna smiled and laughed. "No one knows,"
he said, "let's get back to talking about business."

--------------
COMMENT
--------------



11. (C) It is clear that Bouna did not get the diamond
contract through a transparent bidding process. He also
doesn't seem to have the money or a plan to build the diamond
concession into a productive facility. The fact that Bouna
was carrying diamonds with him that were likely not from his
Aredor property, are indicative of a wider-scale regulation
problem in Guinea's diamond industry.



12. (C) Both Bouna,s outburst at the Embassy guard as well
as his belief that he could just wave his hand to fix the
economic situation in the country serve as examples of CNDD
governance in general. Members of the CNDD continue to
operate within networks of nepotism and influence peddling
while failing to address the complex economic problems that
plague the country's citizens. Having only attended primary
school and having little experience outside of Guinea's
corrupt business environment, Bouna thinks that problems can
easily be solved through personal connections and elementary
business solutions.
BROKENSHIRE