Is This Good or Bad News For The People of Guinea?
In recent years it has become increasingly obvious that China is not transparent in its business dealings on the African continent. But despite the country’s untrustworthy reputation, a Chinese consortium was given the rights to develop two blocks of the Simandou iron ore deposit in Guinea. This means that the Chinese will now take over a mine in Africa with reserves of over two billion tons of quality iron ore. The mine has incredible potential to boost the country’s economy and drastically improve the lives of locals in the area through job creation and a boost in local spending power. It is worth noting that Simandou is also in the middle of a long and contentious legal battle between different companies and countries, and in the midst of all this, China is descending on it.
While various companies are wasting years in court fighting over corruption and the rights to develop the Simandou deposit, its potential has gone to waste. Rio Tinto held rights develop all four blocks of the deposit before the previous Guinean government stripped the company of the rights to block one and two. These rights were acquired by the Israeli businessman Beny Steinmetz’ company BSGR and the Brazilian mining company Vale. Once again, corruption caused the rights to shift hands, this time to the SMB-Winning Consortium, a Chinese company which is already active in bauxite mining in Guinea.
China’s Ever-Increasing Foothold in Africa
Guinea is home to the largest bauxite reserves in the world. Bauxite is required for aluminium production and it is estimated that Guinea has around 7.4 billion tons of it. The surge in bauxite mining in Guinea has mainly been attributed to Chinese investments. And that’s not all they are involved with in Guinea and Africa. China is making massive investments in hydroelectric projects, roads and railway lines all over the continent. But, as with any investment, the idea behind it is to get returns. China would not be making large investments if they weren’t expecting even larger profits. And even though they are pouring money into Guinea and other African countries, it doesn’t necessarily mean that the people of Africa or the economy will benefit from it. Sometimes, when things seem too good to be true, they are.
Will This Really Benefit the Guinean People and Their Economy?
Guinea’s boom in iron ore production is exactly what the country needs to maximise the mining industry’s potential. But, unfortunately, years of political instability and problems with corruption has taken its toll and the country is still scrambling for stability. Even though the people of Guinea desperately need an economic boost, investments from China will likely come with more problems than what it’s worth. China has a long-standing reputation for exploiting African nations under the façade of investment. It is time for African countries to consider that perhaps their motivations are not as benevolent as what they claim them to be. Look at what’s happened in Nigeria, where the entire textile industry has been scuppered because of cheap Chinese imports. Guinea and other African countries should take all the facts into account before allowing China to take so much control of its resources.