Today we’d like to welcome Leonard Lawalan an Analyst with Global Risks Group UK to MetalMiner. Leonard lives in Guinea and caught up with Dr Dave Smith, the CEO of multi-billion dollar Rio Tinto Simandou iron ore operations in Guinea as a follow-up to an earlier MetalMiner post.
This two-part exclusive interview will appear today and run through Monday. The interview occurred in mid-May at Dr. Smith’s offices in Corniche Nord, in Conakry, Guinea. You can read the first part of the interview here.
Leonard Lawal: There have been accusations of lack of transparency in many areas of the award of the mining leases; maybe you can share Rio Tinto’s experience with us.
Dr Smith: Rio Tinto went through a very robust process starting in 2002 when it had a Convention signed by the Government and ratified by law in February 2003. The Convention is very clear and under its direction, a Mining Concession was granted to the company in early 2006. With this certainty, Rio began to massively ramp up its investments in drilling and infrastructure works.
This certainty unraveled last year, however, when actions to remove half of the mining lease were undertaken. This has affected the confidence of Rio, and even more so, when half of the lease was awarded to a small company with no experience in iron ore. This company appears to have had an agreement with the Government regarding the lease back in 2006, at the time when Rio was starting to ramp up its investments.
It is for this reason that we are supportive of an independent review into the legal framework and transactions. We are very supportive of the new Government actions with regards to better transparency, stamping out corruption and their positive stand on things like eliminating drug trafficking. Such actions can only help the people of Guinea and help attract investment.
Leonard Lawal: Natural resources extracting companies in Africa from oil drilling companies in the Niger River Delta in Nigeria to mining companies in Guinea had been accused of gross environmental abuse, tell me about Rio environmental impact prudence?
Dr Smith: Rio is governed by its own, very strict environmental regulations and works very closely with environmental groups around the world. In many places our own environmental regulations are much stricter than the region’s. At Simandou we are working alongside such global NGOs as the UK’s Kew Gardens and Conservations International. This covers many aspects of flora and fauna including water catchment areas and chimpanzees. Our partner in the project, the IFC, also operates to very strict environment standards. Environmental and other groups are welcome to visit the site and see first-hand what is being done.
Rio Tinto has a very clear, publicly stated policy on biodiversity. We are committed to having a net positive impact on biodiversity in the region of SE Guinea. Our detailed baseline studies are aimed at identifying not only the species that will be impacted by the mine but additional areas within SE Guinea with similar species and ecosystems to ensure appropriate offset and mitigation strategies can be developed.
Leonard Lawal: Rio had spent over 400m dollars in Guinea already, why are there still some doubts about your operations in Guinea?
Dr Smith: I don’t believe there are doubts about our intent and our operations from the majority of the population. Indeed, in the region around Simandou we have excellent support and try to work closely with the communities. They see what we are doing and the scale of it. In fact, people who visit the operations are always impressed and most take away a very positive view of our commitment to make this project succeed.
Leonard Lawal: Unconfirmed reports according to industry insiders are that, though the new leader is transparent and wants real development, entrenched interests in the systems are favorable to some competing companies. Are you aware of such rumors?
Dr Smith: We don’t run a multinational, like Rio Tinto on industry rumors. We believe in best practices and the industry is big enough for responsible companies to come in and operate. We have a responsible relationship with countries where we have operations all over the world and we are a business not a political group.
Leonard Lawal: Thanks for your time.