The 2011 Guinean Mining Code: Reducing risks and promoting social benefit in Africa

This article analyses some of the key investment terms of the Guinean Mining Code relating to taxation, government equity stake, permitting and environmental and social needs in the light of criticisms from mining companies, who claim it will deter investment. The article argues that projects which provide governments with a fair share of revenues through increased equity participation and taxation provisions and have positive environmental and social provisions constitute a less risky investment for both banks and their borrowing investors, who will benefit from such provisions when they seek project financing, a popular form of financing used in capital intensive extractive industries. The arguments made in this article can be applied more broadly to other African countries which are reforming their mining laws and are, in the process, faced with similar criticisms from the private sector.