Any investor will tell you that a stable political regime is a key consideration when it comes to putting their money into a mining project. Sadly, however, regime change is a common occurrence in most of Africa’s mining hotspots, often resulting in investor uncertainty.
What’s even sadder is the fact that such change is often a forced one. This week’s military coup in Guinea is a case in point. The country is the second largest producer of bauxite, used in the production of aluminium. Also, Guinea is home to Simandou, one of the world’s largest iron ore reserves. However, over the years Simandou’s development has been mired by controversy, legal wrangling and allegations of corruption and its potential has yet to be reached.
According to a Financial Times report, Colonel Mamady Doumbouya, the leader of the junta who seized power, said that ports in the country would remain open for export and a curfew in mining areas had been lifted “to ensure continuity of production”.
However, despite such assurances, it is inevitable that mining companies in the country as well as investors are feeling somewhat unnerved after the military takeover.
The country is heavily reliant on mining – it contributes to 35% of its GDP and 50% of its total exports. Any government would do well to let operations continue unhindered but in the wake of a coup, one can never be too certain what the future holds for this country and its rich mineral wealth.