CONAKRY, Guinea: Lt. Col. Mamady Doumbouya, chief of special forces of the army and coup leader, greets the crowd as he arrives at the People’s Palace in Conakry on September 6, 2021, before a meeting with ministers of the former President of Guinea, Alpha Conde.
CELLOU BINANI / AFP via Getty Images
On Sunday, a military junta claimed control of the West African country of Guinea and arrested President Alpha Condé, causing uncertainty over key supplies of bauxite and iron ore.
The coup, carried out by an elite special forces unit led by Colonel Mamady Doumbouya, 41, is the latest in a series of seizures of power in the region over the past year, including the nearby Mali and Chad.
Doumbouya has claimed that the army was forced to act amid rampant corruption, human rights abuses and economic mismanagement under Condé, but the act has been condemned by the UN, the African Union and the United Nations. ECOWAS regional bodies.
On Monday, the elite unit allowed travel to resume through checkpoints in the capital Conakry on Monday, banned government officials from traveling abroad and lifted the curfew in mining areas.
In addition, it has jeopardized mining and mineral efforts that are crucial to the country’s economy and global supply chains, according to experts.
Iron ore
The 110-kilometer Simandou Range in Guinea is home to one of the largest untapped iron ore deposits in the world, containing more than 8.6 billion tons of ore with an average iron content of 65%, according to the National Institute of Statistics of Guinea.
Simandou is located in the southeastern interior of the country, a great distance from the capital of Conakry and the west coast which must be reached to access the world market for iron ore at sea.
“The infrastructure demands of the project are, consequently, massive in scale, complexity and cost, greater in all measures than the bauxite export industry that has been established in the country in recent years,” said Andrew Gadd , senior steel analyst of the CRU group.
“Geopolitical risk has been one of the many obstacles that have hindered Simandou’s progress so far and the military coup that is now unfolding in the country marks a significant deterioration in the prospects for a successful development of the reservoir.”
The Simandou project has been somewhat stalled since its discovery in the 1990s as a result of political uncertainty, mining rights disputes and cost issues.
The project would require a huge railway and port infrastructure in a country that ranks 160th out of 186 countries in GDP per capita, according to the IMF. Investors have been reluctant to make a leap of faith amid the ongoing risk that material prices could suffer.
Despite recent progress in the preparatory work, the project has not yet been subjected to a feasibility study.
“Obtaining finance for Simandou has proven very difficult and the uncertainty generated by current developments will challenge stakeholder engagement,” Gadd said.
Bauxite
Guinea has the world’s largest reserves of bauxite, the world’s largest source of aluminum. Aluminum prices rose to a ten-year high on the London Metals Exchange on Monday in fear of a global supply disruption.
“For the country’s booming mining sector, the situation could not have come at a worse time. Miners now have little choice but to stay tuned and wait for more clarity from the transitional authorities, but the contract renegotiation or even expropriation, ”Eric said. Humphery-Smith, Africa analyst at risk intelligence company Verisk Maplecroft.
KAMSAR, Guinea: View of the bauxite factory of Guinea’s largest mining company, the Compagnie des Bauxites de Guinee (CBG), in Kamsar, a city north of the capital Conakry, taken on October 23, 2008. Guinea is the world’s leading exporter of bauxite. , a mineral from which aluminum is produced.
GEORGES GOBET / AFP via Getty Images
“The result will be a major supply disruption to the global bauxite market, as operations are likely to remain closed for the next few days and possibly weeks.”
The Kremlin said on Tuesday it hoped the coup would not harm Russian business interests in Guinea, according to Reuters.
Russian aluminum giant Rusal has vowed to maintain its three bauxite mines and an alumina refinery in the country despite the political upheaval.
“Two steps back”
The coup has brought down the curtain on nearly a decade of political stability in Guinea. Humphery-Smith said he will likely cheer on official bodies throughout the region, meaning “neither Democrats nor autocrats will sleep peacefully.”
President Condé was accused in late 2020 of pushing for a constitutional amendment to get a third term, a move that sparked violent protests across the country.
Cellou Dalein Diallo, leader of the main opposition FNDC movement initially launched to oppose Condé running for a third term, backed the coup in a statement on Monday, saying the takeover “completes” the task. of pro-democratic groups opposed to the preservation of Condé’s power.
CONAKRY, Guinea – A government official escorted by members of Guinea’s special forces enters the People’s Palace in Conakry, Guinea, on September 6, 2021.
Xinhua through Getty Images
“While the feeling among many Guineans is retirement, we are not mistaken that these are two steps backwards for both democracy and the country’s economy. Recovering what until now was a stable and predictable operating environment is all minus one fact, ”Humphery-Smith said.
The centralized transitional authority will be ill-equipped to respond to localized complaints, he suggested, which could increase political and social unrest when elections are finally scheduled.