Guinea claims almost half of the world's bauxite reserves, as well as significant deposits of iron ore, gold, and diamonds. Mining accounted for 17 percent of gross domestic product in 2010 and over half of exports. However, mismanagement and corruption have plagued the sector for decades, contributing to a depressed economy and widespread public mistrust. The government put forward a new Mining Code in September 2011 that includes provisions to combat corruption, protect the environment, and review all existing mining contracts. It has yet to be implemented.

Guinea's Performance on the Resource Governance Index

Guinea received a "weak" score of 46, ranking 33rd out of 58 countries. A very good Institutional & Legal Setting score contrasted with poor performance on the Enabling Environment component.

Institutional & Legal Setting (Rank: 5th/58, Score: 86/100)learn more

Guinea's comprehensive mining legislation and independent licensing process earned it a "satisfactory" score of 86.

The Mines Ministry grants licenses on a first-come, first-served basis and engages in direct contract negotiations with companies. The new Mining Code will provide for bidding when geological information is already known, or when there is interest from several companies, and contains other provisions aimed at reducing the minister of mines' discretion in licensing decisions.

The Finance Ministry collects all non-local taxes from resource companies. In the past, government agencies placed some revenues in offshore accounts. However, since 2011, all tax revenues go into a single account at the central bank.

Access to information is guaranteed in the Constitution, and the new Mining Code will require further transparency. Guinea requires social and environmental impact assessments before granting mining licenses, but public consultation is not mandatory. Guinea is an Extractive Industries Transparency Initiative (EITI) candidate country but has yet to complete the validation process.

Reporting Practices (Rank: 33rd/58, Score: 45/100)learn more

With only limited information available on most aspects of the mining sector, Guinea received a "weak" score of 45.

Licensing requirements are available before negotiations, and, since February 2013, contracts are published, significantly improving transparency. Some companies voluntarily publish their social and environmental impact assessments.

Together with the Planning Ministry, the Finance Ministry publishes information on production volumes, prices, and the value of mineral exports. The Mines Ministry publishes historical data on reserves, along with some information on production volumes and exports. It also regularly publishes the names of companies operating in the country. The central bank publishes information on production volumes, prices, and the value of mineral exports. EITI reports contain information on production volumes, the value of mineral exports, companies operating in the country, subsidies, production stream values, royalties, special taxes, license fees, and acreage fees.

Safeguards & Quality Controls (Rank: 41st/58, Score: 43/100)learn more

Guinea received a "weak" score of 43, reflecting insufficient oversight of resource revenues and the licensing process.

Lawmakers only occasionally review agreements with mining companies and do not scrutinize mining receipts. Payments from companies are not audited by a national audit authority. However, the Mining Code will give interministerial bodies and lawmakers a stronger oversight role. It will also require officials involved in the industry to disclose information about their financial interests in mining projects.

Enabling Environment (Rank: 49th/58, Score: 11/100)learn more

Guinea's "failing" score of 11 is its lowest on any component, due in part to extremely poor performance on the rule of law.

State-Owned Companies

A national mining company, SOGUIPAMI, was created in 2011. When operational it will manage the state's shares in mining projects and enter into joint ventures with private firms. Its governance policies have not yet been established.

Natural Resource Fundslearn more

In 1992 Guinea created a mining development fund that receives a small percentage of revenue directly from resource companies for the promotion of the sector. The current Mining Code has rules for withdrawals and deposits, but these have never been followed in practice, and the fund has presented considerable opportunities for corruption. Its management is completely opaque and it publishes no reports. The fund performs internal audits but does not publish them. The new Mining Code also provides for a Fund for Local Development, financed by a share of royalties and other fixed fees directed to local governments. Regulations are not yet established.

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