MINING COMPANIES CONCERNED ABOUT GOVERNMENT

C O N F I D E N T I A L SECTION 01 OF 02 CONAKRY 000125

SIPDIS

E.O. 12958: DECL: 02/26/2021
TAGS: PGOV PREL ASEC GV
SUBJECT: MINING COMPANIES CONCERNED ABOUT GOVERNMENT
APPOINTMENTS

REF: A. CONAKRY 0102

B. 09 CONAKRY 0470

C. 09 CONAKRY 0436

D. 09 CONAKRY 0559

Classified By: Ambassador Patricia Moller for reasons 1.4 (b) and (d)


1. (C) SUMMARY: A/PolChief met with representatives of
several mining companies over the past week to discuss how
the transition is impacting Guinea's most lucrative industry.
While the representatives seemed optimistic about Guinea's
political future, they were universally disappointed by the
re-appointment of Mahmoud Thiam as Minister of Mines (reftels
A),stating that it would be difficult to fully restart
programming with Thiam in place. In particular, many mining
companies fear that Thiam, who is reportedly still working
closely with junta President Dadis Camara, will use the
transition period to guarantee contracts that will personally
benefit CNDD members. END SUMMARY.


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RIO TINTO "STILL HOLDING ON"
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2. (C) Stephen Din, the Country Director of Rio Tinto, was
optimistic about Guinea's long-term political future.
However, he argued that the mining sector will continue to
suffer during the transition period with Mahmoud Thiam at the
head of the Ministry of Mines (MOM). As such, Rio Tinto would
continue to "hold on" and wait for the elected government to
take power. According to Din, the re-appointment of Mahmoud
Thiam as Minister of Mines shows that the old CNDD guard
maintains significant influence over governmental affairs.
Referring to Thiam as a "CNDD hack," Din believes that the
Minister will use the next six months to ensure that
companies like the Chinese International Fund (CIF) and
Israeli mining company BSG Resources (BSGR) (reftels B & C)
are able to secure their contracts in return for bribes.



3. (C) Din said that Thiam, an American citizen and former
Vice President of UBS in New York, has personally benefited
from promoting CIF and BSGR, as evidenced by his recent
purchase of a $3 million property in New York. Thiam is
allegedly working with the CIF to ensure that China Sonangol
obtain a large portion of Guinea's offshore oil exploration
mileage. With this mileage, the CIF plans to create a
Sino-Guinean oil company (reftel D). According to several
sources, including Din, Thiam is aiming to eventually be
appointed President of the Company after the transition
period. Din said that before the formation of the new
government, several rumors circulated that Thiam would be
removed from his job. However, Din said that people now
believe that Dadis influenced Konate and PM Jean Marie Dore
to keep him in the government. In this context, Din said that
Rio Tinto is hesitant to dramatically increase their
exploration efforts which they scaled down considerably in

2009.


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GAC MAY RAMP UP CONSTRUCTION AND EXPLORATION EFFORTS
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4. (C) In a separate meeting with A/PolChief, Yero Balde, a
project manager for Guinea Alumina and a rising member of the
Forces Vives, confirmed Din's concerns about Thiam and the
transition period. Balde said he was surprised by Thiam's
re-appointment as Minister of Mines, and sees it as a sign
that Dadis still holds considerable influence over the
transition government. (Note: Prior to the formation of the
new government, Balde's name was circulated as a potential
appointment for Thiam's position. END NOTE.) Balde confirmed
Din's belief that Thiam was appointed in order to ensure that
CNDD negotiated mining contracts were guaranteed in the new
government.



5. (C) Though GAC slowed their exploration and construction
activities significantly in 2009 due to the global economic
crisis, they plan to ramp up their mining efforts over the
next six months. According to Balde, GAC is confident that
that the transition will provide a more stable investment
climate than that created under the CNDD.


CONAKRY 00000125 002 OF 002



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DADIS STILL INVOLVED
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6. (C) Representatives from BHP Billiton and Newmont mining
both discussed the lingering influence of Dadis and the CNDD
within the GOG. According to both companies, Mahmoud Thiam is
working closely with Dadis to ensure that deals that provide
kickbacks to the leader and his CNDD compatriots are assured
throughout the transition. BSGR, for example, was recently
awarded a government approval for moving their supplies out
through Liberia rather than Guinea, saving the company
millions of dollars in the short-term. According to several
contacts in the business sector, BSGR bribed Dadis and Thiam
to acquire preferential treatment. Representatives from BHP
and Newmont also claim that Burkinabe president Blaise
Compaore has vested interest in several deals in Guinea which
influenced the appointment of Thiam and several other key
economic ministries.


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COMMENT
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7. (C) Mining companies sustained considerable losses in 2009
due to severe government harassment and the global economic
crisis. According to many mining companies in Guinea, there
are brighter days in the future - though most likely not
until a democratic government is in power. During the
transition period, it will be significant to watch if Thiam
and other CNDD minister holdovers are able to exert the
financial control that they are reportedly intending to
wield.
Moller