African deal for mines is scrapped as valuation fears mount
Mineral-rich Guinea is scrapping a controversial mining deal after fears it represented bad value for the country's valuable assets, keenly in demand from the likes of Rio Tinto and Brazil's Vale.
The controversy surrounds a $25m (£16m) loan made to the African state in April last year to set up a new national mining company. It was arranged by Walter Hennig, a South African-based businessman who has traded diamonds in Africa.
A fierce debate has raged in recent weeks about whether the terms of the loan entitle Mr Hennig's Palladino vehicle to take a 30 per cent stake in the new company, at what would effectively be a massive discount, in the event of a default. This could potentially be worth billions of pounds because the company has the right to take 15 per cent of every mine in the country free of charge.
Eric Joyce, the Labour MP, is among those who believe the loan could allow Mr Hennig to amass a huge cut-price stake in Guinea's mineral industry. George Soros, the billionaire investor, has called on Guinea to investigate the loan.
"There are legitimate questions concerning this loan that call for examination and accounting." Mr Soros wrote to Mr Joyce yesterday. However, Mr Soros does not agree that Mr Hennig is in line for a 30 per cent stake in the event of a default.
The government last night said it had effectively pulled the deal "because the terms of the loan are no longer favourable from a commercial standpoint."
Palladino has denied a default could result in it scooping up "30 per cent of private or national assets worth billions of dollars."
Palladino has said: "Such repayment cannot legally exceed the value of the debt due under the loan agreement and it can in no way result in the appropriation by our company of 30 per cent of private or national assets worth billions of dollars."
Tony Blair's Africa Governance Initiative foundation has been monitoring Guinea's overhaul of its mining industry.
Diving in at the deep end is no excuse for shirking the style stakes
- 2 PornHub begs users to stop uploading video clips of Brazil getting beaten 7-1
- 3 Why I'm on the brink of burning my Israeli passport
- 4 L'Oreal cuts ties with Belgium supporter Axelle Despiegelaere after hunting trip photographs
- 5 The true Gaza back-story that the Israelis aren’t telling this week
Game of Thrones author George RR Martin says 'f*** you' to fans who fear he will die before finishing Westeros saga
Loom bands: Bids for dress made from colourful rubber pass £170,000 on eBay
Supermoon 2014: When and why will the moon look bigger and brighter this summer?
Gaza-Israel conflict: The terrible price Palestinian children are paying for Israel’s war with Hamas
Rotten egg smell could help battle heart disease and Alzheimer's
Sustained immigration has not harmed Britons' employment, say government advisers
War is war: Why I stand with Israel
7/7 memorial defaced on anniversary of 2005 attacks with ‘Blair lied thousands died’ graffiti
Australia facing international condemnation after turning around Sri Lankans at sea
Even when it brutalises one of its own teenage citizens, America is helpless against Israel
Socialist Worker called to apologise over ‘vile’ article saying Eton schoolboy Horatio Chapple's death is ‘reason to save the polar bears’
iJobs Money & Business
£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...
£60000 per annum: Harrington Starr: Trade Desk Specialist (FIX, Linux, Windows...
£35000 per annum: Harrington Starr: Service Desk Analyst (Windows, Active Dire...
£40000 per annum: Harrington Starr: Network Engineer (CCNA, CCNP, Linux, OSPF,...