Guinea probes killing at Vale-BSG iron ore mine protest

Reuters News
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Posted: Aug 08, 2012 5:31 PM
Guinea probes killing at Vale-BSG iron ore mine protest

CONAKRY (Reuters) - Guinea said it launched an investigation into violence near a large iron-ore mine project as a report seen by Reuters on Wednesday showed photos of five people rights groups said had been killed by security forces during a protest.

The clashes between security forces and villagers demanding jobs took place last week in Zogota, where a joint venture between Brazil's Vale, the world's second largest mining company, and Israeli billionaire Beny Steinmetz's BSG Resources (BSGR) is seeking to build iron an ore mine, an official in the mines ministry said.

"A legal inquiry has been opened. ... The president of the republic and the government would like to reassure citizens and investors that every effort will be made to find out what happened in Zogota and punish those responsible," said the government statement, read out on state media.

The killings come at a time of rising tension over mining rights in Guinea, which relies on mineral extraction for 70 percent of its exports.

The government has said it plans to review all mining contracts, "clean up the business environment" and ensure that foreign mining companies comply with a revised mining code.

The Vale BSGR project is among those under review.

The deaths occurred when soldiers dispatched to Zogota opened fire on protesters, said the report by local rights groups who visited Zogota on August 4.

"The village is virtually completely abandoned, especially by women and children. Some adult and young men, armed with guns, catapults, bows and arrows and machetes, remain on guard," the report said.

Mining company staff at the project were evacuated from the site following the incident, a Vale official said on condition of anonymity. A press official at Vale's Rio de Janeiro headquarters said the company had no comment on the situation.

Vale and BSGR are seeking to increase output of high-grade iron ore. Demand for the main steel ingredient is soaring in China, even as the richest ore bodies in Australia and Brazil, the two largest producers, are being depleted.

Guinea, already the world's largest exporter of bauxite, the main ingredient in aluminum, is home to some of the largest, undeveloped high-grade, iron-ore reserves.

The highest grade ores are more than 60 percent pure iron and require little processing before being smelted into iron and steel.

Vale and BSGR said in February they plan to start production of iron ore at Zogota this year. The mine is designed to produce up to 15 million tons of ore a year. Production in 2012 is expected to be 2 million tons.

Vale, which bought a majority stake in the project from BSGR in 2010, has said it hopes to increase output to 50 million tons a year by 2020.

$5 BILLION INVESTMENT

In the coming years Vale, has said it plans to invest $5 billion on Zogota and the nearby Simandou project, investments that are expected to include railway and port infrastructure to ship the iron ore to foreign steelmakers.

The government has not yet approved the BSGR and Vale agreement, which is one of several mining agreements being reviewed by the government.

Zogota is in the far southeast of Guinea, an impoverished West African nation with vast unexploited mineral resources. The government said there had been some deaths but gave no further details.

(Reporting by Saliou Samb; Additional reporting by Jeb Blount in Rio de Janeiro; Writing by David Lewis; Editing by Andrew Osborn and Todd Eastham)