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BHP Billiton exits Guinea

BSGR is only one of the many mining companies whose permits have come under the scrutiny of Guinea’s new government, led by President Alpha Condé.

Sunday Times reports (paywall) that BHP Billiton, which is shedding its non-core operations, is looking for a buyer for its Mount Nimba iron ore project in Guinea.

BHP Billiton did not confirm the story. Nomura Holdings has been to find a buyer.

The move will be a blow to Guinea’s president, Alpha Condé, who made attracting Western investors a top priority for his government.

The country adopted a new mining code, even enlisting the help of George Soros in drafting the regulations.

“There will be a clause in the new code which would prohibit any company from giving bribes. Any company caught giving bribes would lose its license or be penalized,” Condé told Reuters.

However, Conde’s efforts were marred by allegations that a South African middleman had negotiated backroom deal with Guinea’s mining minister, a $25 million loan backed by a 30% stake in the company’s national mining company. If the government defaulted on the loan, the 30% stake would have been worth billions.

BHP Billion is shedding a number of divisions. Last week it announced it was looking at losing its aluminum and nickel assets, and in April the company said it is reviewing its diamond business with an eye to a sell off.

Guinea has great mining assets, 1/2 the world’s reserves of bauxite and significant iron ore, gold and uranium, deposits.

Image of  Alpha Condé from World Economic Forum