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Guinea

Introduction

Guinea is located on the coast of West Africa, and borders Sierra Leone, Senegal, Liberia, Guinea-Bissau and Mali. It is a stable democracy, based on the French government and legal systems. President Lansana Conte was elected to a third seven-year term, but  following his death in office in December 2008, Captain Moussa Dadis Camara, President of the Republic of Guinea's National Council for Democracy and Development, which seized power in a military coup d'etat, is now Guinea's Head of State. Ongoing strife in some neighbouring countries resulted in an influx of refugees but most have returned safely to their home country.

Mining is Guinea's most important industry and its main source of foreign exchange. The biggest component is the mining of bauxite. A consortium including Alcoa has operated the world's third largest bauxite mine in Guinea since 1963. More recently, as bauxite prices have increased many of the majors in the alumina industry have taken or applied for licences in Guinea, including Billiton, Rusal, Dubal, The country is well endowed with natural resources, but these are underdeveloped. The government is taking action to eradicate corruption, including the establishment of an anticorruption commission. Well established relationships and trust together with a thorough understanding of government procedures are essential to work effectively in the country. Guinea is making progress on its economic development, and for several years has sustained steady growth.

The government is working with the IMF and the World Bank to continue economic reforms. A privatization process begun in 1995 has dramatically reduced government participation in commercial activities of the country. This is particularly so in the mining sector which has seen a massive increase in exploration companies taking properties in Guinea. The privatization process is set to continue. Guinea is wide open to foreign investment, with foreign companies treated the same as Guinean companies. Investors are assured full repatriation of capital and profits. In order to attract foreign investment in the mining industry, the country adopted a new mining code in 1995.

The code assures security of mineral title, and grants financial incentives, including certain tax exemptions. Strong connections at a high level are important for working effectively in the country. Guinea is making progress on its economic development, and for several years has sustained steady growth. The government is working with the IMF and the World Bank to continue economic reforms. 

Guinea Diamonds

Guinea is underlain by the extensive Archaean West African craton. Guinea's diamond resources are related to Cretaceous age kimberlitic sills, dykes and pipes, which exploited major north-trending structures in eastern Guinea. It is estimated that at least 800m of erosion has taken place in this area, meaning that most primary kimberlite pipes and dykes have been eroded away. Subsequent alluvials are located in most rivers draining north of this area. Artisanal workers from alluvial workings produce most of Guinea's diamond production.

Guinea has estimated diamond reserves of approximately 20 Mct. Diamonds are Guinea's second largest export, after bauxite. With the ban of unlicensed ventures, foreign mining companies have begun to invest in the diamond sector. The Aredor Diamond Mine, located in southeastern Guinea, near Macenta, has produced some of the world's most valuable diamonds, totalling more than 1.3 million carats at a value of US$377 million. Trivalence Mining Corporation through its wholly owned subsidiaries hold an 85% ownership interest in the Aredor mine and concession, which represents the most highly documented alluvial diamond reserves in Guinea. Aredor produced 35,000 ct in 2000, up from the previous year's production. Aredor has historically produced large, high quality diamonds, the most recent being a 146 carat stone that fetched $1.9 million.

De Beers, through its subsidiary Debsam, are also active in Guinea with the granting of several exploration licences (22). Debsam is apparently carrying out extensive exploration and are carrying out a regional sampling program, including the drill testing of several kimberlite pipes and dykes. The country produced an estimated total of almost 740,000 carats in 2004.