Guinea in talks with China over resources investment

LONDON: Guinea's ruling regime is in talks with China over investment in its natural resources, the west African country's minister of mines said, according to British newspaper the Financial Times on Monday.

Mohamed Thiam said talks could be concluded by the end of the year between the regime in Conakry and the Hong Kong-based China International Fund (CIF) to bring in billions of dollars of financing for infrastructure, minerals projects and oil prospecting, according to the business daily.

The deals would be among the largest of their kind in Africa, said the FT.

The CIF would pump in seven billion dollars of finance for projects ranging from the creation of an airline to power generation.

The fund would also join forces with Angolan state oil company Sonangol to explore for oil offshore. The Guinean regime, CIF and Sonangol had signed a memorandum of understanding on a prospecting deal, Thiam said.

"We think over the next five years there's going to be in excess of seven billion dollars in investment in the Guinea Development Corporation's various projects," said the former UBS banker.

"Instead of just giving natural resources... in exchange for promises of developing our infrastructure, we decided to take the joint venture approach and co-own not only the infrastructure development companies and projects, but also whatever natural resource conpanies or projects are developed jointly."

Guinea is the world's largest bauxite exporter and also has large gold, uranium, diamonds and iron ore deposits.

Opposition leader Sidya Toure, prime minister from 1996 to 1999, said: "I do not understand how you can believe that we can inject this kind of money into the economy of Guinea where the total gross domestic product is only three billion dollars."

The Chinese commerce ministry declined comment when contacted by AFP, with a press officer saying that China International Fund was a Hong Kong company that the ministry "knows nothing about".

The officer, who refused to give his name, also declined comment on possible criticism of China for dealing with Guinea's government.

The foreign ministry did not immediately respond to a request for comment.

CIF and Sonangol did not respond to requests for comment, the FT said.

The newspaper said the deal could potentially pitch China against Western interests at a time of growing competition for Africa's natural resources, and also raise questions about "the willingness of Chinese groups to prop up rogue African governments".

A military junta took power in Guinea in December and earned international condemnation last month for a bloody crackdown on opposition supporters.

United Nations officials and human rights groups say more than 150 people were killed on September 28 when Guinean troops opened fire on an unarmed crowd gathered in a stadium in Conakry to protest against military leader Captain Moussa Dadis Camara's rule.