Guinea is the world's main exporter of bauxite Guinea's new mining code will curb corruption and make more money available for development, Prime Minister Mohamed Said Fofana has said. The code gives the government a free 15% share in mining companies and demands greater financial transparency.
Several foreign firms have warned that the code, which came into law over the weekend, will deter investors.
Guinea, despite being the world's main exporter of the aluminium ore bauxite, is one of Africa's poorest countries.
A democratic government was elected in December, ending the authoritarian and military rule that had blighted the country since independence in 1958.
In an address on national TV, Mr Fofana said the government would hold investors accountable and ensure they paid taxes and royalties.
Foreign companies would have to invest a minimum of $1bn (£633m), he said.
'God-given riches'The BBC's Alhassan Sillah in the capital, Conakry, says this is intended to prevent companies bribing officials in exchange for cheap mining rights.
Continue reading the main story"[The] mining code adopted in Guinea increases considerably tax pressure on mining companies, making it senseless to invest in development and new projects”End Quote United Co Rusal Previous mining contracts would be reviewed to ensure there were no irregularities, our reporter says.
On Monday, Mines Minister Mohamed Lamine Fofana told Reuters news agency that the government had overturned an agreement by the ex-military junta to give secretive investment group China International Fund the rights to all of Guinea's unexploited resources.
The new code guarantees the government a minimum stake of 15% in companies and the option of buying a further 20%, Reuters says.
It also requires companies to carry out environmental and social impact studies before they are granted mining permits, the agency says.
The prime minister said this would prevent environmental degradation, making sure that communities living near mines did not suffer.
Our reporter says most Guineans have welcomed the mining code, hoping that they will finally benefit from the country's "god-given riches".
But it has been opposed by several big companies operating in Guinea, including Moscow-based aluminium company United Co Rusal, which said it would not make further investments in Guinea.
"[The] mining code adopted in Guinea increases considerably tax pressure on mining companies, making it senseless to invest in development and new projects," it said in a statement to Bloomberg news agency.
Another major investor in Guinea, Australia's Rio Tinto, also expressed concern about the code, saying it would cost the company an extra $10bn, the Christian Science Monitor news website reports.
Our correspondent says the government is unlikely to bow to business pressure because mining sector reforms was a key promise to voters in the build-up to December's elections.
The government took over from the military junta that had seized power in December 2008 on the death of the previous President, Lansana Conte, who had ruled for 24 years.
Guinea holds half of the world's bauxite reserves, as well as large deposits of gold and diamonds.
However, most of its citizens live on less than $1 a day.
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