What Does the China-backed Mining Group Bring to the Community?–The Impact of Chinese Mining Companies in Guinea

By Chen Lu

With the world’s largest high-grade bauxite and iron reserves, Guinea, a country on the coast of West Africa, has attracted mining companies from all over the world, including China.[1] The China-backed SMB-Winning Consortium was founded in 2014 and has now become the greatest bauxite develop in Guinea. Along with other leading bauxite producers, SMB-Winning has made Guinea the world’s largest bauxite exporter, as well as the largest bauxite source county for China.[2],[3] The Consortium has recently gained the tender to develop the largest iron mine in the country and is expected to bring Guinea’s iron production to another level.

Inevitably, the achievement of the Consortium comes with a tremendous amount of controversies and critics for the company’s environmental and social impacts. Meanwhile, the Consortium has also been taking initiatives to bring benefits to the environment and the community. But these initiatives did not seem to prove effective to the locals.

Guinea’s Largest Bauxite Developer in the World’s Large Iron Mine

The SMB-Winning Consortium is a joint venture of 4 companies: Winning Shipping Ltd., a Singaporean shipping company; United Mining Supply, a French logistics company; Shandong Weiqiao Group, a leading Chinese aluminum producer; and China Yantai Port Group, a major port in China. The State of Guinea is also a partner of the Consortium and holds 10% of the shares.

In 2015, Société Minière de Boké (SMB), a company founded by the Consortium officially started bauxite production in Boké region in northwestern Guinea. Guinea holds over a quarter of the global bauxite reserves, over half of which are stored in Boké. Within three years, SMB was able to produce 60 million tons of bauxite, making it the largest bauxite developer in Guinea.[4],[5]

Predictably, The mine production brought significant benefits to the local economy. SMB-Winning has employed over 7,000 people directly and over 10,000 people indirectly and invested more than US$ 1 billion in mining projects. [6],[7] By 2018, SMB had contributed around US$ 600 million to Guinea’s economy, including salaries, payments to suppliers, and tariffs.[8]

In 2019, SMB-Winning invested $3 billion to start the construction of the 135-km Dapilon-Santou Railway to facilitate mine transport. This will be the first modern railway built in Guinea in the past half-century.[9] According to the Managing Director of SMB, Frédéric Bouzigues, the company strives to create “a post-mining society by implementing agro-industrial projects along the railway, which will also open up the agricultural region.”[10]

Locations of Santou, Boké and Dapilon. The railway will link new bauxite mines in Santou, Boké (from smb-guinee.com)

In the same year, SMB-Winning gained the tender to operate in Block 1 and 2 of Simandou, an iron mine in southeastern Guinea. Besides SMB, the other half of the mine (Blocks 3 and 4) is managed by Rio Tinto (47%) and Chinalco (41%).[11]

Stretching for 110km in southeastern Guinea, the Simandou Mountain Range is home to vast terrestrial forests and the endangered West African Chimpanzees. At the southern end of the mountains lies one of the largest and finest iron ore in the world. The Simandou mine has an estimated iron reserve of around 2 billion tons, with iron content higher than 65%, which is the largest of its kind.[12] With just Blocks 3 and 4 of the mine, Simandou has the potential to double the GDP in Guinea.[13]

SMB is aiming to start production by 2025. Just like Boké, the Simandou project could make a significant contribution to the transformation of the Guinean economy and the country’s transport infrastructure.[14] “The Simandou Project will be crucial for Guinea’s future,” Sun Xiushun, Chief Executive of SMB-Winning, said in the statement. “With the Transguinean railway, Guinea will now have a real lifeline linking four Guinean regions, accelerating administrative and economic decentralization and strengthening the country’s rail network.”[15]

The view of Simandou Mountains (flicker Leo Klemm)

Natural Habitat, Dust, and Health

Despite economic and social benefits, mining inevitably poses threats to the environment around the mining area. Simandou is a biodiversity hotspot where many endangered primates, birds, and amphibians inhabit. These natural forests are now being fragmented and destroyed with the progress of mining. According to a National Geographic Emerging Explorer, Steve Boyes, The mine in Simandou “will not only destroy the habitat of the chimpanzees and increase bushmeat hunting by workers and their families” but also “damage mountain catchments and alter hydrology”, said Steve Boyes, a South African biologist, and National Geographic Explorer.[16]

Mine production in Simanodu (flicker Leo Klemm)

The environmental impacts can further harm human health. In 2018, A mining ministry-commissioned audit estimated that about 4000 to 5000 trucks drive on SMB’s roads in Boké every day.[17] These trucks, loaded with mines, produce dust along the highway, polluting water and air. The dust also enters villager’s homes and covers their crops. A woman who lives across a mining road developed by SMB says that “Even our saliva has changed color due to the dust.”

For residents living near the mine, the polluted water resources have brought heavy burdens to their lives. According to a 2018 report by Human Rights Watch (HRW) on the human rights impact of SMB and another bauxite mining company, residents in Boké say that mining companies are seizing land for mining and preventing local people from accessing natural springs.[18] “The company cut across the rivers where we get water when they dug their mining road, without giving any warning,” said a village leader near the SMB mine. Water scarcity means women, who are responsible for almost all household chores, have to travel longer distances to get fresh water. A woman living in the SMB port had to queue for water at 4 am. The villagers feel that SMB does not seem to have much regard for the locals in the process of mining. [19]

As the SMB project blocked rivers, people who live nearby have to wash their clothes in dirty water. (Human Rights Watch)

With the air and water getting polluted, along with power outages, the locals could not sit back anymore. In 2017, protesters blocked roads and prevented the project from operating. However, as Guinea’s largest bauxite miner with tremendous economic contributions, SMB was not forced to stop the project by the resistance and was instead allowed to postpone the project to come up with better compensation to local people.[20]

Is It Really That Bad?

In response to the dust pollution criticized by HRW, Bouzigues, the Managing Director of  SMB, said that the company has been taking measures to reduce dust by watering roads. SMB-Winning has partnered with a local consultancy SEES and an international consultancy Louis Berger, who would make assessments of the environmental and social impact of the Consortium to keep it in line with international standards. According to Bouzigues, SEES and Louis Berger measured PM10 and PM2.5 levels near the mining area, which was “well below the WHO standards”.[21]

As part of its other CSR initiatives in the environment, since 2019, SMB-Winning has been working with the Chimpanzee Conservation Center, a sanctuary based in Guinea, to rescue and rehabilitate chimpanzees.[22] Meanwhile, SMB-Winning also trains and educates its employees on how to limit damage to chimpanzee’s living environment and habits.

To improve living standards and health conditions, SMB-Winning has also taken a series of initiatives. Take the Boké region as an example, in 2018, the Consortium built 24 greenhouses near a town to allow the locals, particularly women, to grow different fruits and vegetables and diverse the economy; in 2019, it donated over 1,500 solar panels to people from 51 villages who did not have access to electricity; in 2020, it organized a dental practice in the Katougouma area to improve the dental health for locals; in the same year, it launched a campaign to vaccinate livestock against plague and Newcastle Diseases, ensuring both the health of livestock and wealth of herders.[23],[24]

SMB-Winning has also been trying to improve the welfare of workers. Every year, SMB-Winning selects and sends around 30 Guinean employees to China for a three-month skill training program. This training program provides an opportunity for the local staff to refine technical skills, learn management tools, and become more competent in the Guinean labor market.[25]

The training center established in Guinea (Facebook, SMB-Winning Consortium)

Why is the perception still not good?

Despite the positive impact that SMB-Winning has been trying to make, the perception of villagers still seemed to be negative. The villagers’ response in the HRW report is the most direct evidence of SMB’s action on environmental pollution. Besides villagers, “SMB’s activities have been shrouded in controversies over the impact on the environment and livelihoods in local communities”, said Zhang Jingjing, a Chinese environmental lawyer who did field investigations of the company’s problems in Guinea.[26]

The small scale of the CSR projects is one of the reasons that SMB-Winning keeps getting criticized for its operation. According to Zhang, the “small scale livelihood support for affected local communities…(which) cannot substitute legal obligations to minimize and mitigate negative impacts”.[27]

Second, the lack of understanding of the actual needs of locals might deepen misunderstanding of the locals. In response to strikes and protests, the Consortium came up with a rewarding system that gives bonuses to those who do not strike or protest in three months. However, local people perceived this reward as the Consortium’s strategy to buy them over with money so they would stop oppose SMB. People did not feel that the Consortium was solving the problem, and even felt insulted. They don’t want the Consortium to reward them or send them food, but to face the problems that mining brings to their lives and solve them.[28]

The Way Forward for Communities around Chinese Mining Companies

Besides SMB-Winning, other Chinese mining groups such as Chinalco, and Henan International Cooperation Group are also booming in Guinea. The environmental and social problems faced by SMB are also shared by these conglomerates in Guinea. How to conserve the environment while maintaining efficient production is an ongoing challenge for the whole mining industry.

There are companies from other countries taking different strategies, which might be examples that Chinese companies could learn from. Guinea Alumina Corporation (GAC), a mining company based in Conakry, Guinea, aims to ensure the profitability of the company while providing the same benefits and opportunities to local people and the country.[29] GAC has a mature principle of how to build deep relationships with local people and respect local laws and customs. Anglo American (AA), another world-class mining company like SMB, set up specific goals for sustainable development. By 2030, AA aims to “reduce net GHG emissions by 30%, improve energy efficiency by 30% and reduce the abstraction of freshwater in water-scarce regions by 50%.”[30]

Admittedly, the environmental and social problems caused by Chinese mining companies are complex and the countermeasures taken could be controversial. Considering the tremendous investment and economic growth that they bring to the country, these companies have great potentials to bring more good for the community and offset the negative impacts.  

[1] Wilhelm, C., & Maconachie, R. (2021). Exploring local content in Guinea’s bauxite sector: Obstacles, opportunities and future trajectories. Resources Policy, 71, 101935.

[2] Nandi, A., & Bangoura, A. Y. (2020). A Booming Bauxite Mining Industry of Guinea and Future Prospects. AlCircle. https://www.alcircle.com/press-release/a-booming-bauxite-mining-industry-of-guinea-and-future-prospects-60790

[3] Rey, P., Mazalto, M., & Jeanne, I. (2021). Reconciling standards and the operational needs of mining projects in Africa: Examples from Guinea. The Extractive Industries and Society, 8(1), 23–31.

[4] Ibid.

[5] Wilhelm, C., & Maconachie, R. (2021). Exploring local content in Guinea’s bauxite sector: Obstacles, opportunities and future trajectories. Resources Policy, 71, 101935.

[6] Keita, M., & Traore, O. (2020). Environmental Impact of Open PIT Mining: Case of Bauxite Mining in Guinea.

[7] The SMB Winning Consortium, an international bauxite consortium. Société Minière de Boké. (n.d.). International Journal of Applied Environmental Sciences, 15, 167–177. http://www.smb-guinee.com/en/consortium-smb-winning/

[8] Ibid.

[9] Bayane, B., & Yanjun, Q. (2020). Past, present and future development of West African railways. Journal of Sustainable Development of Transport and Logistics, 5(1), 103–114.

[10] Frédéric Bouzigues about Human Rights Watch study : “We hope that the current debate will give rise to constructive solutions.”. (2018, October 17). Ecofin Agency. https://www.ecofinagency.com/finance/1710-39096-frederic-bouzigues-about-human-rights-watch-study-we-hope-that-the-current-debate-will-give-rise-to-constructive-solutions

[11] Ibid.

[12] Cope, I. L., Wilkinson, J. J., Herrington, R. J., & Harris, C. J. Geology and Mineralogy of the Pic de Fon Iron Oxide Deposit, Simandou Range, Republic of Guinea, West Africa.

[13] Simandou South – Ministry of Mines and Geology: Republic of Guinea. (2016, February 23). Ministry of Mines and Geology Republic of Guinea. https://mines.gov.gn/en/projects/simandou-south/

[14] Ibid.

[15] Jamasmie, C. (2020, March 5). China-backed JV to develop giant Simandou north iron ore deposit in Guinea. Mining.com. https://www.mining.com/china-backed-jv-to-develop-giant-simandou-north-iron-ore-deposit-in-guinea/

[16] Stiles, D. (2015, January 20). Scandal and intrigue overshadow environment at the Simandou mine in Guinea. Mongabay Environmental News. https://news.mongabay.com/2015/01/scandal-and-intrigue-overshadow-environment-at-the-simandou-mine-in-guinea/

[17] Human Rights Watch. (2018). “What Do We Get Out of It?”. https://www.hrw.org/sites/default/files/report_pdf/guinea1018_web2.pdf

[18] Ibid.

[19] O’Mahony, J. (2019, June 20). Bauxite mining and Chinese dam push Guinea’s chimpanzees to the brink. Mongabay Environmental News. https://news.mongabay.com/2019/05/bauxite-mining-and-chinese-dam-push-guineas-chimpanzees-to-the-brink/

[20] Pike, L. (2020, November 30). ‘China’s Erin Brockovich’ Goes Global to Hold Chinese Companies Accountable. Inside Climate News. https://insideclimatenews.org/news/19062020/china-pollution-environmental-companies-accountable/

[21] Frédéric Bouzigues about Human Rights Watch study : “We hope that the current debate will give rise to constructive solutions.”. (2018, October 17). Ecofin Agency. https://www.ecofinagency.com/finance/1710-39096-frederic-bouzigues-about-human-rights-watch-study-we-hope-that-the-current-debate-will-give-rise-to-constructive-solutions

[22] La Fondation SMB-Winning soutient les missions du Centre de Conservation des Chimpanzés pour la conservation de l’espèce et contre le braconnage. (2021, March 10). Société Minière de Boké. http://www.smb-guinee.com/la-fondation-smb-winning-soutient-les-missions-du-centre-de-conservation-des-chimpanzes-pour-la-conservation-de-lespece-et-contre-le-braconnage/

[23] Relations communautaires en zones minières : l’exemple de la SMB. Société Minière de Boké. (n.d.). http://www.smb-guinee.com/relations-communautaires-en-zones-minieres-lexemple-de-la-smb/

[24] 1.540 panneaux solaires offerts pour faciliter l’accès à l’énergie aux habitants de Dabis, Kamsar et Tanènè. Société Minière de Boké. (2009, June 24). http://www.smb-guinee.com/1-540-panneaux-solaires-offerts-pour-faciliter-lacces-a-lenergie-aux-habitants-de-dabis-kamsar-et-tanene/

[25] 30 employés du Consortium SMB-Winning vont bénéficier d’une formation de 3 mois en Chine. Société Minière de Boké. (2009, June 25). http://www.smb-guinee.com/30-employes-du-consortium-smb-winning-vont-beneficier-dune-formation-de-3-mois-en-chine/

[26] Pike, L. (2020, November 30). ‘China’s Erin Brockovich’ Goes Global to Hold Chinese Companies Accountable. Inside Climate News. https://insideclimatenews.org/news/19062020/china-pollution-environmental-companies-accountable/

[27] Tianjie, M. (2020, May 14). How does 2020 bode for China’s overseas investment? A Chinese lawyer’s take. China Dialogue. https://chinadialogue.net/en/business/11792-how-does-2-2-bode-for-china-s-overseas-investment-a-chinese-lawyer-s-take/

[28] Human Rights Watch. (2018). “What Do We Get Out of It?”. https://www.hrw.org/report/2018/10/04/what-do-we-get-out-it/human-rights-impact-bauxite-mining-guinea

[29] Haidara, A., Shundo, K., & Kim, Y. S. (2017). Environmental and Social Impact Assessement Summary, Boke Mine Rail & Port Project. African Development Bank Group. https://www.afdb.org/fileadmin/uploads/afdb/Documents/Environmental-and-Social-Assessments/Guinea_-Boke_Mine_Rail_and_Port_Project-ESIA_Summary.pdf

[30] Anglo American. (n.d.). Healthy environment. Anglo American South Africa. https://southafrica.angloamerican.com/our-difference/healthy-environment

One thought on “What Does the China-backed Mining Group Bring to the Community?–The Impact of Chinese Mining Companies in Guinea

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s