DAKAR: Mining firms doing business in Guinea face uncertainty after the West African country’s newly installed military leadership vowed to revise contracts.

Companies such as Rio Tinto, Alcoa and Rusal have spent billions in the country, which is the world’s biggest bauxite exporter, a gold producer, and has the potential to be a major source of iron ore.

Junta leader Capt Moussa Dadis Camara singled out the state’s contracts with mining companies in his first public indications of economic policy on Saturday, saying defective deals would be revised, a line that was later toned down.

“It is a question of opening negotiations to set the basis of a collaboration that is advantageous for all parties,” Nouhou Thiam, spokesman for the National Council for Democracy and Development (CNDD), said on Sunday. The CNDD has not named any companies or mining concessions that might be a risk, not has it said what might constitute a defective contract.

Camara’s CNDD took power after the death of long-serving President Lansana Conte last week, and although there appears little internal opposition to the coup, it makes for anxious times for companies spending money in Guinea.

“There is going to be operational uncertainty,” said Rolake Akinola, senior analyst, West Africa at consultancy Control Risks. “Relationships and dynamics are highly fluid. There will be a lot of uncertainty and lack of clarity in the short to medium term.”

A key policy question is whether the Conte administration’s practice of using foreign resources firms as cash machines will be reversed, analysts said.

This enriched powerful individuals, but left Guinea’s public finances in tatters, a situation which led to local people attacking mining firms in frequent protests about lack of electricity and water.

Camara has said fighting corruption will be a priority of his government.

“It remains to be seen whether the Camara regime will seek to redress the historical imbalance in the country’s finances by setting up a credible ... contract review process as has recently largely happened in the Democratic Republic of Congo or seek merely to extort monies from the country’s foreign operators,” said Sebastian Spio-Garbrah, Middle East and Africa analyst at Eurasia Group.

If the new administration does not stick to its anti-graft word, foreign investors could find the faces changing, but the policy remaining the same.

“It is possible that new commercial interests in the mining sector will emerge in the new administration,” Control Risks’ Akinola said.

Shifting allegiances