Guinea Bissau: Government breaks off contract with Farim phosphate concession-holder

5 September 2008

Bissau, Guinea Bissau, 5 Sept – The government of Guinea Bissau said Thursday in Bissau it had broken off the contract that granted exploration of phosphates in the Farim region, in the north of the country, to GB Phosphate Mining, due to alleged illegalities committed by the Swiss-owned company.

The decision was announced in a statement issued by the Office of the Minister for Natural Resources, Soares Sambú, which accused GB Phosphate of “serious and reiterated violations of the lease and mining laws,” in Guinea Bissau, and therefore the government had opted to break off the contract.

The government also accuses the company of transferring the Farim phosphate mining rights to another company, called GB Mining Holding, which occurred with the knowledge or approval of the government, as required by law.

The Guinean authorities also accuse GB Phosphate of not providing any financial guarantee for the project’s execution, as required under the terms of Guinean law.

The contract between the Guinea Bissau government and the company was signed on 23 February, 2006.

The international consortium led by GB Phosphate, headed up by Swiss national Leonce Aspelin, planned to invest US$105 million in phosphate mining in the Farim region.

Start of mining had been scheduled for the third quarter of 2008 and initial prospecting pointed to a potential of 166 million tonnes of phosphates, which would allow for mining over a 35 to 40 year period. (macauhub)