By John Helmer, Moscow
The latest announcement by Kommersant newspaper of a deal in which the Government of Guinea relieves United Company Rusal of the billion-dollar liabilities it was facing for its bauxite exporting and alumina smelting activities in the African republic isn’t what it’s meant to look.
The deal between Oleg Deripaska, the Guinean president Alpha Conde, and Conde’s son, Mohammed Conde, was disclosed back in August. That was not long after President Conde had this to say about the involvement of his son in state business: “My son is not a businessman or an entrepreneur in anything. He was educated in the United States, he worked in Brazil and then in London and came back to help me here after the death of my brother. I speak bad English, it is English, so I asked him to be my translator to follow to follow me to the records of cooperation with South Africa.”
The intermediary in the Rusal deal identified by sources in Conakry, the Guinean capital, was Bouba Sampil, whose conversation on the subject with President Conde has been witnessed. “There is a public face to things and a private friendship that was forged,” according to a Guinean source. “Few people in the Guinean government are involved. And most of them still believe they are going to war with Rusal, not knowing their boss has cut a deal.” Sampil has been identified as an advisor to Mohammed Conde.
One of several Guinean sources familiar with the matter claims that as token of the new goodwill between Rusal chief executive Deripaska and Conde, a private aeroplane has been arranged to carry the president and his entourage to recent international meetings in the US, France, and China. Without tail numbers and identification of the aircraft chartering contract, this is no more than bird talk.
What the birdie has to say about the private deal between Conde and Deripaska also isn’t enough to explain why the Guinean government is having trouble with a public announcement of the deal. Until now, that has threatened Rusal with more than a billion dollars in liabilities for the company’s Friguia mining and smelting operations, environmental damage, tax and customs duty violations; as well as the revocation of part or all of Rusal’s mining concession for Dian Dian, the largest source of Rusal’s bauxite reserves worldwide.
According to a report today by Alfa Bank metals analyst Barry Ehrlich, “the situation remains fragile in the country [Guinea] and could change again after parliamentary elections in December.” The Guinean opposition to Conde believes his domestic standing has been weakening so swiftly since an abortive assassination attempt in July by disaffected soldiers that he cannot risk a backlash, alleging corruption, if Rusal escapes the sanctions proposed by the predecessor and transition governments last year.
The visit to Moscow this week of Guinean Minister for International Cooperation, Mustafa Koutoub Sano, has not resulted in an official statement about the Rusal problem. Instead, there is a claim of what Sano has said on the matter in Kommersant, published today. After reading it, sources in Conakry say Sano fumbled his assignment.
Sano is an Islamic scholar, who was educated in Saudi Arabia, and holds advanced degrees in Islamtic law from Malaysia and Islamic finance from Tunisia. He was minister for religious affairs in last year’s transition government, before being moved to the international cooperation portfolio this year. According to his website, he’s currently working to complete a paper for publication on “the Punishment of Apostasy and the history of the Apostasy in Islamic Thought.”
Two reporters for Kommersant, Pavel Tarasenko and Roman Asankin, claim “the main outcome” of Sano’s talks in Moscow this week, has been “to demonstrate Rusal’s positive attitude to the Guinean leadership”, and vice versa. Regarding the court orders and government claims against Rusal, they quote Sano as saying: “in Guinea there have been changes, and therefore existing projects have started to be re-examined.” As for Rusal’s comfort blanket, Sano was even more coy; the Kommersant reporters reporting him as saying that “everything will be decided at the negotiating table.” Except that no direct quotes are used for what Sano actually said.
Much clearer in their attribution, the Kommersant reporters say Rusal is far from happy with the terms of the public deal that has been struck with Conde and his men, and is threatening to walk away. “ ‘The recently adopted a new Mining Code (significantly raising tax rates — Kommersant) has changed the business environment in the bauxite-alumina industry of Guinea and raised questions about [Rusal’s] prospects in this country,’ – the company said.”
Rusal’s website has issued no word on the Sano talks.
The Russian government communiqué on the talks was issued yesterday by the Ministry of Natural Resources, whose minister, Yury Trutnev, is the Russian co-chairman of the inter-government commission. Apart from identifying Rusal among the Russian commercial interests represented at the talks, there is no reference to the Guinean Government claims against Rusal, and ample hints the two sides have yet to strike an agreement they can release.
Trutnev’s communiqué says: “The parties signed the final protocol and Memorandum of Cooperation in the field of agriculture. Trutnev expressed confidence that these documents are starting on the path of further joint work. Representatives of the Russian-Guinean commission discussed the existing projects and the need to develop direct trade and economic relations. The meeting heard reports of three working groups on mineral resources, economic, scientific, technical and trade cooperation and military-technical sphere. As part of the IPC agreed to conduct a series of consultations and to amend the agreement in the field of fisheries, education, and an agreement on mutual protection of capital. At the meeting, the parties reached a mutual agreement to start work on a Memorandum of Understanding between the Ministry of Natural Resources and Environment and the Ministry of Mines and Geology of Guinea Republic on cooperation in the field of geology and mineral resources, an intergovernmental agreement between the chambers of commerce of Russia and Guinea, and an agreement between Rosstandart and Guinea Institute of Standardization.”
“The minister instructed [subordinates] to expedite the conclusion of the Memorandum between the Ministry of Natural Resources and Environment and the Ministry of Mines and Geology of Guinea. The document creates the legal framework and conditions for the development of resources and constructive engagement. To sign the memorandum of cooperation in the field of Geology and Mineral Industry is planned by the end of 2011.”
“Trutnev, summing up the meeting, stressed that the Russian side hopes for a successful continuation of the work between the two countries and marks a great potential for cooperation not only in the mining sector, but also in the field of communications and high technology. As the Minister noted: “The first priority is to sign the Agreement on cooperation in the mining industry and update previous agreements signed between our two countries from almost a decade ago.”