THE world's largest mining company has decided to pull out of Guinea weeks after The Sunday Times revealed a backroom deal that gave a shadowy middleman rights to billions of dollars worth of mining assets.
BHP Billiton's decision to put its Mount Nimba iron ore project up for sale is a blow for President Alpha Conde, who has spent the past two years courting Western investors. The West African country has the world's largest reserves of bauxite, the raw material for aluminium, as well as large deposits of
diamonds, iron and gold.
Mr Conde made reforming the mining sector his top priority since his election in 2010, and brought in Tony Blair as a personal adviser through the former British prime minister's African Governance Initiative.
Billionaire trader George Soros has offered advice on creating a new mining code.
The Sunday Times revealed last month that a secret deal would give Palladino Capital, controlled by Walter Hennig, a South African diamond trader, rights to 30 per cent of the operations of a new national mining company if the government defaulted on a $US25 million ($24.4m) loan.
The deal prompted a World Bank investigation and the government quickly cancelled the loan.
BHP is retreating globally from projects as commodity prices fall and China's economy slows. Other assets it has put on the block include a diamond mine in Canada and aluminium assets in Brazil. The exit from Guinea is a discouraging sign for Mr Conde. BHP has hired investment bank Nomura to find a buyer.