As mere spectators of such a perfect illustration of the dead-weight and corruption that plagues the economic development of potentially rich countries in Africa, we may eventually reflect on who eventually benefits from such a turmoil in Guinea ?
Last April, in the case is U.S. v. Thiam, 16-mj-07960, U.S. District Court, Southern District of New York (Manhattan) a jury of the People delivered its verdict after about six hours of deliberations, following a six-day trial. Thiam could face as long as 10 years in jail.
The sentence should be announced by August 2017. This will provide sufficient timing for the defense to appeal the verdict.According to prosecutors, Mahmoud Thiam accepted $8.5 million in bribe from a secretive Chinese conglomerate lead by Sam PA, a prominent Chinese citizen, seeking Africa’s most valuable mining rights for iron, gold diamonds and bauxite.
Supporting a non-guilty plea, Mahmoud Thiam and his lawyer, who do not deny the fact that Thiam did accept the alleged 8.5$ million amount as a personal loan, managed to ascertain that his lender, Mr Sam PA and his enterprises did not benefit in any way from his proximity to Mr Thiam.
China Sonangol did not benefit from its proximity with Thiam
It is a fact that throughout its plea, the prosecution failed to demonstrate that the lender Mr PA did extract any benefit from this transaction : Thiam did not help Chinese Tycoon Sam Pa secure any lucrative mining rights in Guinea for the joint venture of the China International fund and China Sonangol, both entities closely linked to Pa.
Born in Guinea, Mahmoud Thiam left his birthplace at the age of seven years in the early 1970s, after his father, a well-known banker, was tortured and murdered by the country’s dictatorship of that time. He went to live with his uncle – a U.N. diplomat – moving from countries to countries. He was granted U.S. citizenship and studied at Cornell University.
Thiam’s Professional Career
Mahmoud served Merril Lynch and then UBS in its New York Office. However, after spending many years in different countries, serving various organizational positions, and starting his own businesses, Thiam was eventually invited to become the mining and geology minister of Guinea back in 2008.
Benefits of Simandou
Estimated at almost 2.2 billion tons, the Simandou’s prestigious land contains iron ore equivalent to the world’s entire iron ore production in 2013. Considering its size and quality, some experts claim that whoever gains the rights over Simandou’s mining may ultimately dominate the globe’s iron-ore sector for an entire generation. Since the project is so advantageous with fabulous mineral wealth, it has been consistently dogged by disputes, delays and allegations of corruption, putting it many years away from its production.
Thiam as a Mining Minister
Based on his former declaration during and long after his mandate as Mining Minister Thiam has always wanted to go against the establishment and in particular against RioTinto, and enable the people of his country to benefit from its natural resources.
Anglo-Australian mining giant Rio Tinto, the exclusive owner of the rights for Simandou for over 20 years, has always delayed the development and exploitation of Guinea’s mines, which could have benefited Guinea’s economy, in order to protect his own mining assets located in neighboring countries. By blocking the development and exploitation of Guinea’s resources, Rio Tinto managed to protect the value of his resources outside of Guinea.
In addition, the current Guinean president, Alpha Condé, persistently claiming that the development of Africa and especially of Guinea could not be based upon this mining sector but on the development of the agro-industry, is radically opposed to Thiam’s view on this issue.
Alpha Conde, and we may question his attitude, has always favored Rio Tinto’s stand, even if it meant that the Guinean economy would not benefit from its mining resources.
Bribery allegations have swirled over mineral development in Guinea for years. Rio Tinto Group accused billionaire Beny Steinmetz’s BSG Resources Ltd. of conspiring with Vale SA to steal the rights to an iron ore deposit in the country. BSGR did indeed acquire the rights for half of Simandoou’s lots from Rio Tinto, under the Ministry of Mr Thiam.
That lawsuit was dismissed In 2015. Beny Steinmetz and Vale have brought forward substantial infrastructure investments to their project that would have substantially benefited the Guinean economy in the long run : BSGR’s original plans for Simandou involved reviving a train line built by Swedish engineers in the Sixties to deliver the iron ore south through Liberia to Buchanan.
BSGR vs Soros
In retaliation, Beny Steinmetz has engaged a major procedure to sue billionaire George Soros, an advisor to Guinea’s government since 2010 and any proven associates in this venture for $10 billion in February 2017, claiming that BSG Resources Ltd has lost the right to mine the Guinea because of a defamation campaign Soros and his associates at high Guinean government levels ran against them.
“Soros was motivated solely by malice, as there was no economic interest he had in Guinea,” BSGR said, adding that his “illegal conduct destroyed” the group’s investment in Guinea. Steinmetz intends to prove that all these libels and unsubstantiated allegations were made for personal benefits of President Condé as well as in the interest of Rio Tinto, one of the world’s biggest oil, iron and gas mining company.
It is interesting to notice that Rio Tinto, the Anglo-Australian miner is caught up in a bribery investigation of its own, after leaked emails appeared to show that senior executives approved a $10.5m payment to a French banker in Guinea in 2011, apparently in exchange for his services in helping it reclaim half of its rights to Simandou. The miner has reported itself to authorities in the US, the UK and Australia.
As mere spectators of such a perfect illustration of the dead-weight and corruption that plagues the economic development of potentially rich countries in Africa, we may eventually reflect on who eventually benefits from such a turmoil in Guinea ? Our editorial team at Afrikonomics won’t fail to follow the developments of this affair. Your comments are welcome.