Guinean President Moussa Camara said he has asked the country’s Justice Ministry to consider legal action over a 2006 transaction that gave control of the Friguia bauxite and alumina complex to United Co. Rusal.
The Guinean government was paid a fraction of the amount the company was valued at by consulting firms, Camara said on state television late yesterday.
“Guinea has to exercise its rights by getting back this factory which belongs to it,” Camara said. “It is not a question of leaving this refinery, which has to serve future generations.”
Camara took power on Dec. 23 after a coup that followed the death a day earlier of Lansana Conte, who had ruled the west African country for 24 years. Conte’s government concluded the agreement with Rusal, and Camara’s government has said mining deals made with the previous regime will be probed.
“The decision has been made to establish a commission on the privatisation of Friguia, which will thoroughly study the situation and give its final conclusion,” Rusal spokeswoman Elena Shuliveystrova said by e-mail. “We, Rusal, welcome this decision because Rusal privatized Friguia legitimately and in full compliance with the legislation.”
Friguia has the capacity to produce 640,000 metric tons of alumina and 1.9 million tons of Bauxite a year, according to Rusal’s Web site. Bauxite, an ore, is used to make alumina, which in turn is used in the manufacture of aluminum. Guinea is the world’s biggest bauxite exporter.
Guinea agreed to let Rusal buy full control of Friguia, Rusal said in April 2006. Rusal, which had been operating the mine through a concession, bought 100 percent of Friguia from the state and acquired the 15 percent it didn’t already own in Alumina Co. of Guinea, which manages Friguia. The Russian company didn’t give a purchase price at the time.
Camara said Rusal paid $19 million for the assets, while consultants had valued it at $257 million. The president, who didn’t name the consultants, also said action will be taken against the Guineans who negotiated the transfer of the company to Rusal.
Guinean ministers arranged the sale without going through the national privatisation company, Momo Sacko, a government lawyer, said today, according to Reuters.
Anatoly Patchenko, the head of Rusal’s Guinean operation, has taken refuge in the Russian embassy in the African country’s capital, Conakry, Guinea’s state-owned radio reported.
Separately, Rio Tinto Group is considering developing an iron ore mine in Guinea, while AngloGold Ashanti Ltd. owns a gold mine in the country.
Source: Bloomberg
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