President Emmerson Mnangagwa has sailed through the impact of Covid-19 and Russia’s invasion of Ukraine. With several months away from Zimbabwe’s ... general election where he will be seeking another term, Mnangagwa is facing a bigger challenge that could further cripple the Zimbabwean ailing economy: a power crisis.
In a statement released on 27 July, the Guinean government, Winning Consortium Simandou (WCS) and Rio Tinto Simfer announced the formation of the joint venture Compagnie du TransGuineen (CTG). In accordance with the framework agreement signed on 25 March, this joint venture aims to advance plans to co-develop the rail and port infrastructure of the Simandou iron ore project.
The next step for the partners is to work on the shareholder agreement, finalise cost and financing estimates, and obtain all necessary approvals to move the project forward. Ownership of the CTG will be shared between Rio Tinto’s subsidiary, Simfer Jersey Ltd, and WCS, each receiving a 42.5% share of the capital, with Conakry taking a 15% free equity stake.
“Guinea’s mining resources belong […] to all its sons and daughters. Consequently, nothing will be done to their detriment,” said Djiba Diakité, president of the strategic committee of the Simandou project and chief of staff of the Guinean presidency. He said that the country remains open to any “responsible and serious” mining investment as long as it participates in the country’s economic development and is committed to a “stable and serene business climate”.
This is an “important step”, the statement said, after more than two weeks of complete stoppage of activities at Simandou due to the inaction of Rio Tinto Simfer and WCS in the face of Doumbouya’s demands. The head of the Guinean junta had, in mid-June, demanded from the operators the creation of the joint venture under penalty of ordering the cessation of activities.
A similar standoff took place in March, and the threats were carried out. Desirous of seeing “national interests […] preserved by [the] foreign operators”, the head of the junta considered that the two mining companies did not provide sufficient guarantees that Guinea’s interests would be taken into account.
This tactic led to the conclusion of an agreement after almost two weeks of very tense negotiations. The Guinean government and the companies signed an agreement on the construction of a railway from Beyla to Forecariah (670km) linking the four blocks of the deposit to the deepwater port of Moribaya. In addition to the creation of a joint venture to develop the project, the contract provides for the granting of 15% of the railway and the port to the state, in addition to the 15% share of the ore it already owns.
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