The Looting Machine
Warlords, Oligarchs, Corporations,
Smugglers, and the Theft of Africa’s Wealth
By Tom Burgis
5
When Elephants Fight,
the Grass Gets Trampled
It was a humid, overcast Sunday afternoon in April 2013, and Frederic
Cilins was hungry. “Let’s sit down, grab a bite,” he said to the woman
who emerged from a taxi to meet him at Jacksonville International Airport
in Florida.1
According to a transcript of their conversation subsequently
published by a government inquiry in Guinea, the pair found a place to
eat inside the airport’s swish terminal and took their seats—Cilins, a balding Frenchman in his early fifties, and Mamadie Touré, a curvaceous west
African twenty years his junior. They made small talk for a few moments,
speaking in French. Cilins’s daughter had given birth the previous day, he
said, making him a grandfather for the first time.
Almost immediately the conversation turned to money. “I need cash,
now,” Touré said. Cilins explained that she could have $20,000 right away
and would receive $200,000 more once she arrived in Sierra Leone. He
would take care of the plane ticket too. She started to haggle. A waitress
came over. Cilins switched to English to order a chicken sandwich for
Touré and a Caesar salad for himself. He changed tack. In Sierra Leone,
the neighbor to Touré’s native Guinea, she could be tranquil, far from the
troubles that were closing in on them. But Touré wanted to settle the financial terms of their arrangement. Hadn’t Cilins said he would give her
$50,000 up front, not $20,000?
“No, no, no,” Cilins said. “Listen carefully, listen carefully. I told you the
deal.” He went over it again. A few thousand dollars was neither here nor
there. “The deal for the documents and for the declaration was what I told you: we destroy all the documents, you get two hundred and then eight
hundred, which is yours, whatever happens. Whatever happens, you have
one million, which is yours.”
The Frenchman was losing his cool. He had done business in Africa’s
wild west for years, but this was a particularly delicate conversation. Touré
had in her possession half a dozen signed contracts dating from 2006 to
2010, apparently detailing how she would be rewarded in cash and shares
if she helped to arrange for a company called BSG Resources (BSGR) to
be awarded mining concessions, including rights to Simandou, one of the
world’s richest virgin deposits of iron ore, located in a remote corner of
Guinea.2
(When the contracts later became public, BSGR said they were
forgeries.) The Guinean government of the day had granted the company
rights to Simandou in 2008. Two years later Vale, the world’s biggest iron
ore miner, had agreed to pay $2.5 billion for a share of BSGR’s rights, a
princely return on the $160 million that BSGR had spent on preliminary
development work at its prospects and one of the most spectacular deals in
the recent history of African mining.
But now there was a problem. Touré had told Cilins that the FBI had
come to see her. The reason for their interest was that she was no ordinary
Guinean: she had been the fourth wife of Lansana Conté, the dictator who
had granted BSGR its rights days before he died in December 2008. The
widowed Touré had moved first to Sierra Leone, then to Florida, where
federal agents had paid her a visit after they got wind of possible breaches
of the Foreign Corrupt Practices Act and of money-laundering statutes
that forbid channeling the proceeds of corruption into the United States.
In a series of phone calls and meetings over the previous weeks Cilins—
who had worked as BSGR’s intermediary in Guinea but, as the company
is at pains to stress, had never been its employee—had sought to cajole
Touré into destroying the documents before the FBI got hold of them. He
had persuaded her to sign a declaration denying that she had played any
role in awarding mining rights to BSGR or received any money from the
company. He had encouraged her to leave the country for Sierra Leone.
On top of the million dollars he had offered for destroying the documents,
Cilins had promised as much as $5 million more if BSGR came through
the current Guinean government’s review of past mining contracts with its
interests intact.
“Do you need anything?” asked the waitress, bringing the pair’s order.
“Mayonnaise, mustard?” Cilins sent the waitress away and turned back
to Touré. The conversation meandered through family, Guinean politics,
the weather in Miami. Cilins ordered a cheesecake for each of them and
probed Touré about the FBI agents who had asked her questions. She
said she had told them she didn’t have any documents, but the agents had
threatened to get a subpoena and bring her before the grand jury that had
been convened in New York to hear evidence about the corruption allegations. “It has to be destroyed quickly,” he said. The waitress brought Cilins
his change. “No, thank you very much,” he said.
“Oh, thank you so much,” said the waitress, “have a great one.”
Touré pressed again for more cash up front. “I’m not a child,” she
snapped. Cilins blew his top. “I’m tired of this, Mamadie. What do you
want to do? You tell me what you want to do. Me, I’m tired. You’re reproaching me. I come, I bring you money, I find solutions for you, I do this,
that. I’m tired. So you tell me what you want. It’s up to you to decide.” He
told her it was in her own interests to destroy the documents—not to do so
would set off an “atomic bomb” for her. He berated her for giving copies of
them to an acquaintance, who in turn had brought them to the attention of
the new Guinean authorities. “I’m not saying you’re a child, but I’m saying
you’ve made some bad decisions,” Cilins said. He paused and excused
himself, saying he needed to check the departure boards for his flight.
A man approached. “Stand up,” he said to Cilins. “Put your hands behind your back.”
Beny Steinmetz was born into the mining business. The youngest son of
Rubin Steinmetz, founder of one of Israel’s most successful diamond trading companies, in 1977 he completed his military service and embarked,
aged twenty-one, for an apprenticeship in Antwerp. The Belgian port has
been the center of the diamond trade for five centuries and is still the conduit for the vast majority of rough stones that flow in from distant mines to
be cut, polished, and sold on to jewelers. Lean and handsome, Steinmetz
soon started to build a reputation as one of the most formidable figures in
the African diamond trade. He bought stones in war-torn Angola.3
The
company he founded with his brother, Steinmetz Diamond Group, became the biggest buyer of rough stones from De Beers, the cartel that dominated
the trade. The Steinmetz family diamond empire sponsors Formula One
cars and showcases its stones at lavish parties set alongside such aesthetic
landmarks as Bangkok’s Temple of Dawn and Scarlett Johansson.
As his fortune grew, Steinmetz added metal mines and real estate to his
portfolio and relocated from Israel to the lakeside Swiss city of Geneva. In
2011 Forbes ranked him at 162 in its rich list, with a net worth of $6 billion,
comfortably ahead of Bernie Ecclestone and Richard Branson and almost
double that of eBay founder Jeff Skoll. On his personal website an unnamed acquaintance is quoted as saying, “The phrase ‘the sky is the limit’
isn’t applicable to Beny. To him, the sky is merely the beginning.”
Steinmetz was quick to respond to the changes in the mining market
around the turn of the century. The demand of fast-growing Asian economies for base metals prompted mining houses to diversify their operations, switching investment from treasures like diamonds to the bulky raw
ingredients of electrical wiring and steel. Alongside Dan Gertler, his fellow Israeli mining tycoon who had cultivated the Kabila regime in Congo,
Steinmetz made a move on Katanga, the southern Congolese repository
of copper and cobalt in quantities unsurpassed elsewhere. A company
called Nikanor, in which Steinmetz and Gertler were major shareholders,
secured rights to a dilapidated copper mine there. In 2008 Glencore, the
giant commodities trader that would strike more Congolese deals involving Gertler, bought the group.4
By then Steinmetz was closing in on a still
more coveted prize in another benighted state in francophone Africa.
When Guinea’s French colonial rulers departed in 1958 they did so in
a fit of post imperial sabotage. Ahmed Sekou Touré, Guinea’s liberation
leader, had spurned Charles de Gaulle’s offer to join a francophone union
in Africa. France granted independence, but at a vindictive price, declining to leave behind even the light bulbs in the government offices. Sekou
Touré was undaunted. “We prefer poverty in freedom to riches in slavery,”
he proclaimed.5
Poverty did indeed endure, but the people of Guinea knew no freedom.
Sekou Touré became the first in a procession of venal and violent autocrats. The newly independent Guinea, like dozens of its African peers,
enjoyed only nominal sovereignty. Superpowers and mining houses held
sway, adapting their allegiances to suit the prevailing despot.
Guinea avoided the civil wars that ripped apart its neighbors, Sierra Leone and Liberia, where rebels funded by diamond sales lopped off hands.
Not that you would know it to look at Conakry, Guinea’s seaside capital.
The malarial metropolis feels as though it is slowly decomposing into the
mulch of the tropical foliage. The interior of the country is as deprived as
its scenery is breathtaking. Ill starred and misgoverned, Guinea belongs
to the lowest circle of poverty, along with Congo, Niger, Somalia, and a
handful of others, where all the indicators measuring human well-being
are abysmal, well below even the African average. On average, out of every
thousand babies born in Switzerland, all but four will at least see their fifth
birthday. By the same age, one hundred and four Guinean babies per thousand have died.6
Along the capital’s dank, pitted streets shuffle alarmingly
high numbers of those who made it through infancy but whose traumatic
start in life left them with cerebral palsy. Guinea’s 11 million people are
significantly more undereducated and unwell than almost anyone else on
the planet.
When Sekou Touré died in 1984, Lansana Conté, a soldier who had
served in the French army prior to independence before rising to a senior position in the Guinean military, was perfectly placed to lead the coup
that commenced his quarter-century rule. He was part of the generation
of leaders—Mobuto in Congo, Bongo in Gabon, and dos Santos in Angola among them—whose decades in power through the 1980s and 1990s
finally dashed the high hopes of the post independence years. They ruled
through theft and repression, treating their countries’ oil and minerals as
their personal property. They cocooned themselves in looting machines.
But those looting machines only work if they can be plugged into international markets for oil and minerals. For that, Africa’s despots need allies in
the resource industry.
For a country no bigger than the UK, Guinea has a disproportionate
share of the Earth’s metal. “It’s got this huge mineral endowment,” a foreign
mining executive in Guinea told me. “Some of the deposits are fabulous,
unlike anything else in the world.” The country sits on the largest recorded
reserves of bauxite, the ore that is refined into aluminum, a highly resistant
metal that is one of the more vital commodities in the global economy. Alloys of aluminum are everywhere: in kitchen foil, drink cans, pill packets,
aircraft. Guinea has for decades ranked among the biggest exporters of bauxite. But it is also home to vast, untouched reserves of the only metal
more in demand than aluminum: iron.
Iron ore is used to make steel, the material without which the modern
world as we know it would not exist. Annual steel production worldwide
is 1.5 billion tons, or roughly one ton for every five people. The biggest
steelmakers, among them ArcelorMittal, India’s Tata family, and Baosteel
of China, bestride a global industrial economy that needs steel for ships
and bridges, forks and scalpels. So do the largest iron ore miners: Vale of
Brazil and Rio Tinto, the Anglo-Australian mining house that has grown
from its nineteenth-century origins digging up copper by the banks of a
Spanish river to be the world’s second-most valuable mining house, after
its great rival, BHP Billiton.
In 1996 executives from Rio Tinto met Lansana Conté’s mining minister to talk about exploring Guinea’s mountainous eastern territory for
iron ore.7
The following year Rio was granted a permit to prospect along
the 70-mile Simandou range. In 2002 Rio’s geologists discovered a body
of such high-quality ore that it had few peers in size and value anywhere.
Further exploration established that it contained more than 2.4 billion tons
of top-notch iron ore, making it the best untapped deposit in the world.
But Simandou lay 435 miles from the coast. Tapping the ore would mean
building a railway across difficult terrain and a massive port at the end of
it. All told, the mine and the infrastructure would cost something like $20
billion—the biggest investment ever undertaken in African mining.
Conté churned through prime ministers and his security forces slaughtered protesters, but Rio maintained its interests. In 2006, after years of
wrangling with Guinea’s Parliament, the company finally secured the document known as a mining convention for Simandou, the legal rights to
start digging. But progress was slow. The Guinean authorities grew frustrated, and other parties began to show an interest. Among them was Beny
Steinmetz.
Steinmetz had already carved a swathe through Africa’s mining industry, and Guinea’s bounty of iron ore was a tempting prospect for BSGR,
the mining arm of the family conglomerate that bears his initials. But
BSGR faced two obstacles. First, Guinea was unfamiliar territory. Second,
Rio Tinto had locked up rights to the choicest deposits. The company
needed someone on the ground who could work out how to proceed. It found Frederic Cilins. Cilins had done business across Africa since the
early 2000s, including in Congo and Angola. With two partners he had
also developed what BSGR would later describe as “extensive business
operations” in Lansana Conté’s Guinea.8
Cilins started to work as an intermediary for BSGR in Guinea in 2005.
According to an interview he gave to an investigator years later, he hung
around the Novotel, the hotel in Conakry where anybody who is anybody
stays, gathering scraps of information on Rio Tinto.9
While Rio was charting Simandou’s ore bodies, Cilins was mapping Guinea’s political contours. As Cilins cultivated his contacts, he edged closer to the heart of
power: the presidency.
Like many other Guinean Muslims who could afford to do so, Lansana
Conté had multiple wives. He had already taken three brides when, in
2000, he met the beautiful eighteen-year-old daughter of a former colleague
from the military. Within the year Mamadie Touré became the president’s
fourth wife.10 They did not live together, but he supported her financially
and they spent time in one another’s company at the house she was given
and at the presidential villa, discussing the affairs of state.
Around 2005 the president’s young wife received a new visitor, the man
with whom she would sit in hushed, tense conversation seven years later at
the Jacksonville airport. According to Touré’s recollections—an important
plank in the evidence published by a subsequent Guinean inquiry—Cilins
told her when they met that BSGR wanted to get its hands on iron ore
rights.11 Officials and ministers who helped in the endeavor would get a
share of $12 million.12 According to Touré’s version of events, supported
by the contracts Cilins was so keen to destroy but that BSGR claimed were
fakes, she began to advance the company’s cause in exchange for agreements to pay her millions of dollars and award her shares in BSGR’s Guinean venture. (BSGR has said that it never made any payments to Touré.13)
First, Touré took Cilins to meet Lansana Conté at the presidential palace.
Not long afterward, in February 2006, BSGR received its first iron ore
rights. But the company wanted more—a slice of Simandou.
Perhaps Touré saw nothing untoward in her dealings with Cilins and
BSGR. In Conté’s Guinea there was no division between politics and
business. The country was ranked alongside Iraq, Myanmar, and Haiti as
the world’s most corrupt.14 That which belonged to the state belonged to Conté. Guinean life was, by and large, destitute and brief. But Touré had
found herself among the small clique of Guineans who could ensure their
escape from poverty—those who enjoyed the dictator’s favor. She recalled
years later in a sworn statement that, when she consulted her husband about
$200,000 she said she had been given after one of her meetings with Cilins
and other emissaries from BSGR, “he told me it was my good luck.”15
After BSGR won its first rights, it stepped up its efforts. Cilins made way
for senior figures from the company itself, Touré recalled. Asher Avidan,
who served for twenty-seven years as a senior official in Israel’s foreign
and defense ministries before joining BSGR as the head of its Guinean
subsidiary, showered Touré with gifts, she recalled.16 On one occasion,
Touré says, Avidan showed her to a room in which a million dollars was
laid out on a bed for her.17 When in 2014 I asked BSGR about this and
other incidents described in Touré’s statement, the company declined to
answer my questions.
Alongside gifts that BSGR’s emissaries provided to influential Guineans—among them a diamond-encrusted miniature Formula One car,
which its representatives later said had been given to the mining ministry, not an individual—the company also played on frustration in Conté’s
government at the slow pace of Rio Tinto’s work at Simandou.18 In 2008
BSGR’s strategy paid off. In July the government stripped Rio Tinto of
the rights to the northern half of Simandou on the grounds, disputed by
Rio, that the company had missed its deadlines to start mining, making it
liable, as is standard in the industry, to cede a portion of its holdings. In
December, by ministerial decree, those rights were awarded to BSGR. For
Beny Steinmetz and his company the breakthrough had come in the nick
of time.
Reportedly a diabetic and a chain smoker, Conté’s health was failing.
On December 22, 2008, two weeks after BSGR had taken possession of the
northern half of Simandou, Conté died. If Guineans dared to hope that deliverance was at hand, they were wrong. After twenty-four years in power,
Conté’s death left a vacuum, into which the army promptly stepped.
After coming close to disaster in 2007, the following year Sam Pa was back
on his feet. The Queensway Group had avoided the fallout from stock market regulators’ investigations in Beijing and Hong Kong into the award
of a contract for an Angolan project given by China International Fund,
its infrastructure arm, to a Chinese steel company. The warnings that the
Chinese Ministry of Commerce had issued to Chinese companies about
doing business with the Queensway Group had either been rescinded or
ignored—restoring a crucial plank in the syndicate’s business model of
using its access to African rulers to generate deals both for itself and for
Chinese state-owned groups.19
Pa led a dizzying expansion of the Queensway Group’s interests. It
snapped up prestigious real estate in Manhattan and pressed on with its
courtship of North Korea. But Africa—and Angola in particular—remained
the foundation of its empire. To replicate the phenomenally lucrative
model it had constructed with Manuel Vicente and the Angolan Futungo,
it needed to find other African countries that had both natural wealth and
rulers who wielded undiluted power through a shadow state.
Guinea’s “Christmas coup” after Lansana Conté’s death in late 2008
brought to power a little-known army captain in his forties. Moussa “Dadis” Camara had a chiseled jaw, a red beret, and a flair for spectacle. Like
many a putschist, he proclaimed himself the man to clean the stables. The
ringleaders of the cocaine-trafficking networks that had taken root in the
security forces were denounced in public, and Conté’s son Ousmane confessed on television to being involved in the drug trade and was thrown
in jail. The new government would examine past mining deals. The junta
baptized itself the National Council for Democracy and Development.
The young captain was unpredictable, paranoid, and apparently nocturnal. He held meetings in the dead of night and slept by day. Ministers and
investors were summoned to his base at a Conakry barracks, where bureaucrats and businessmen in robes and suits mingled with soldiers in fatigues.
Dadis received visitors in a room hung with portraits of himself in heroic
poses.20 He would scream in the faces of minions who had earned his ire.
Even those castigated in error were too scared to point out that the strongman had mistaken them for someone else. A showman, Dadis delighted in
upbraiding, live on television, foreign investors and diplomats he deemed
disrespectful. The performances became known as “The Dadis Show.”
The junta’s combustible leader was a stark contrast to the suave, cosmopolitan investment banker who returned to Guinea to assume the powerful position of mining minister. Mahmoud Thiam was not the first member of
his family to run the gauntlet of holding government office under a despot:
when Thiam was five his father, a former head of Guinea’s foreign trade
bank, was named as finance minister, only to be caught up days later in
one of Sekou Touré’s purges. He was arrested, tortured, and killed.21 His
young son was taken into exile and wound up in the United States, where
he was granted citizenship. Bright and possessed of a winning charm, he
gained an economics degree from Cornell University and went into banking, rising through Wall Street. First with Merrill Lynch, then at the New
York office of the Swiss bank UBS, Thiam managed wealthy foreign clients’ fortunes and advised finance ministries and companies from Norway
to China to South Africa. He made enough money to donate $4,600 to
Barack Obama’s 2008 presidential campaign.22
Thiam was in his mid-forties by the time the new dispensation in Conakry gave him a reason to go home. He surveyed the horizons of Guinea’s
economy and decided to shake things up. Guinea relied on mining revenues for 85 percent of its exports, but the government only made a pittance
from the country’s resources, which were under the control of some of the
most powerful figures in the industry. The mining ministry Thiam took
over was a warren of crumbling corridors whose occupants, though sometimes brilliant, were scarcely equipped to take on the multinationals’ armies
of lawyers. But Thiam knew the world of high finance and deal making. He
has a smooth bearing, enhanced by his shaven head and dapper suits, and
he was prepared to lock horns with the big beasts of the mining business.
Thiam’s first target was Rusal, the aluminum giant that mined Guinea’s bauxite, and its Russian oligarch owner, Oleg Deripaska. Deripaska
had acquired a Guinean bauxite mine and refinery in a 2006 privatization.
Thiam claimed that the price Rusal paid had been a fraction of what the
assets were worth and that the sale was invalid—allegations that Rusal
disputed.23 When Rusal listed its shares amid much fanfare on the Hong
Kong stock exchange, Thiam demanded that part of the proceeds of Rusal’s share sale go to settle what Thiam claimed it owed the African nation,
which accounted for some 10 percent of the company’s worldwide bauxite
production. Once alleged environmental damage was included, the sum
Thiam sought exceeded a billion dollars.24
Rusal refused to buckle, and the standoff dragged on. (Rusal refused
to accede to demands for money, and after Thiam and the junta had left
office, the company repaired its relations with Guinea’s government, announcing in 2014 that it had begun work on a new bauxite mine.25) But this
was only one front in Thiam’s campaign. Like other senior Guinean officials, he bridled at what he saw as the condescension of the multinationals,
particularly the brash Australians from Rio Tinto. Rio had been happy to
tout Simandou as a prize asset when it fought off an attempted takeover by
BHP Billiton, but Guinea had been waiting more than a decade for Simandou to start yielding its ore.
Thiam ratcheted up the pressure on Rio, threatening to strip it of more
of its rights if it failed to acknowledge that the northern half of the deposit,
which Conté had transferred to BSGR, had been legitimately confiscated.
(Thiam’s jousting with Rio would eventually prompt Henry Bellingham,
minister for Africa in David Cameron’s British government, to write to him
and three other senior ministers, lobbying for the company and warning
that any further action against London-listed Rio would “send a negative
signal to investors.”26) Thiam backed BSGR, arguing that having two separate projects to mine Simandou would ensure that the ore would finally
start to flow.
“We could be sitting on those reserves for another fifty years as we have
already for fifty years,” Thiam told me.27 Guinea, he noted drily, was not a
publicly traded company: unlike listed mining corporations such as Rio,
whose share prices benefited from undeveloped mineral reserves on their
books, the country gained nothing when its minerals sat in the ground.
“We only make money if and when we export iron ore. We have the richest
and most abundant iron ore on Earth, and we are still one of the poorest
countries.”
According to his enemies, Thiam also had less honorable motives. In a
2014 lawsuit Rio Tinto accused him of receiving a $200 million bribe—subsequently revised to $100 million—from Beny Steinmetz to ensure that he
protected BSGR’s newly won claim to Simandou’s northern half.28 (Thiam
called Rio’s allegations “false, libelous, and borderline comical” and described them as an attempt by the company “to divert attention from their
unwillingness to develop Simandou”; BSGR was similarly dismissive: Tinto chose to do nothing with its mining rights so the mining rights were
taken away. Baseless and bizarre lawsuits like this won’t change that fact.”29)
Simandou was the country’s greatest prize, but it was many years away
from generating revenues, and the junta’s most pressing concern was to
bring in some ready money. Immediately after the coup Dadis had pledged
that he would organize elections, hand power to civilians, and take his boys
back to the barracks. But soon he was letting it be known that he planned
to renege on his promise not to stand as a candidate. Guinea’s isolation
deepened, and free-spending soldiers were rapidly depleting coffers that
cuts to aid following the coup had already depleted. “It was a question of
the survival of the economy,” Thiam told me later.30
One day in the middle of 2009, a few months into the job, Thiam was
having lunch when a fellow minister called, insisting that he abandon his
meal and come to the Novotel to meet some potential investors. Upon arriving Thiam was introduced to a Chinese woman he had not met before.
She was Lo Fong-hung, Sam Pa’s cofounder of the Queensway Group.
Thiam was told that the Guinean ambassador to China had organized the
delegation’s visit. China Sonangol, the Queensway Group’s joint venture
with Angola’s state oil company, was raking in revenues from Angolan
crude sales, and Lo got Thiam’s attention with some sizable numbers.
“She told me how much money they could deploy,” Thiam recalled. “I
was a little skeptical, but I told them they were welcome to join, if you are
as big as you say you are.” Sam Pa turned up and introduced himself too.
After the meeting Thiam briefed Dadis on the encounter.
Thiam decided to run some checks on the prospective new investors,
whose major dealings to date had been in Angola. He knew Manuel Vicente
and Sonangol from his banking days; the two men were good friends.31 He
challenged Pa and Lo: “If you are so close to Manuel Vicente, come back
with him.” Three days later, Thiam recalls, Vicente landed in Conakry on
a flight with Pa. Thiam took them to see Dadis. Pa promised the head
of Guinea’s junta that he would send some money forthwith. Within two
weeks about $30 million arrived, Thiam said. “It was a goodwill gesture to
show they were serious and capable.” Thiam told me the money was earmarked to fund improvements to Guinea’s water supply and to rent emergency power generators. Even if it was indeed spent on such admirable endeavors, it would have freed up other funds for the junta to deploy or to
plunder.
When Thiam went to China shortly after his first meeting with Pa and
Lo in Conakry he was, like the Portuguese-Angolan tycoon Helder Bataglia before him, left with the distinct impression that they enjoyed high level connections to the Beijing authorities. “If they were not a government entity, they definitely had strong backing and strong ties, given the
reception we got in China,” Thiam told me. “The level of clearances they
had to do things that are difficult in China, the facility they had in getting
people to see us [and] the military motorcade gave us the impression that
they were strongly connected.” Thiam was convinced. With his newfound
allies, he set up joint ventures between the Guinean state and Queensway
Group—registered not in Guinea but in Singapore, where China International Fund and China Sonangol had established headquarters as their international reach grew—and started to hatch plans for Guinea’s minerals.
Thiam was jetting around, cutting deals like the investment banker he
was, accumulating allies and enemies and helping to keep the junta from
bankruptcy. One Monday in September 2009, nine months into his tenure
at the mining ministry, he caught a flight in Qatar. When he disembarked
in Paris he heard that Dadis had unleashed havoc.
Torrential rains poured down on Conakry on the morning of September
28, 2009. Among the tens of thousands of Guineans who made their way
to the national stadium the mood was a mixture of trepidation and jubilation.32 The stadium lies halfway along a finger of land that juts out into the
Gulf of Guinea, not far from the capital’s ramshackle airport. Its previous
major spectacle had been June’s two-to-one victory for the national soccer
team over the visiting Malawians in a World Cup qualifier. Today something more feverish even than the west African passion for football was in
the air.
The opposition, comprised of assorted human rights groups, Conté-era
ministers, and agitators for democracy, had called a mass mobilization to
put pressure on Dadis to make good on his pledge to allow free elections
and make way for the victor. Despite half a century of consecutive tyrannies under Ahmed Sekou Touré and Lansana Conté, Guineans saw a glimmer
of opportunity. The crowds thronged into the national stadium’s stands
and onto the pitch, chanting, “Liberté! Liberté!” They danced and sang
and prayed, cheering the arrival of opposition leaders. Gendarmes tried to
force the demonstrators to disperse outside the stadium, firing tear gas and
live rounds that killed at least two, but still the crowd massed inside. The
downpour delayed some would-be protesters en route to the stadium—
they were the lucky ones.
The chanting protesters were about to be taught a brutal lesson in the
remorseless logic of resource states. In lands where the state has been hollowed out, ties of ethnicity form a strong bond in the ceaseless struggle
to capture the pot of resource rents. In Guinea Dadis was doubly in a minority. He was a Christian in a Muslim nation. And he and his inner circle
belonged to small ethnic groups from the forestière region in the southeast
of the country. For those who owed ethnic allegiance to Dadis, his coup
offered a once-in-a-generation shot at prosperity and power, a chance for
a turn at the spout of the global economy that poured millions of dollars
into Guinea for its ores. Having seized their moment, Dadis and his clan
needed to protect their claim.
The day before their scheduled demonstration at the national stadium
opposition leaders received calls from the town of Forecariah, about
forty-four miles southeast of Conakry.
33 They were told that buses full of
young men had left the town, bound for the capital. A few weeks earlier
residents of Forecariah had noticed some new arrivals. The young men
had forestière accents; they came from Dadis country. The gendarmerie
academy outside Forecariah had been converted to a new use: training an
ethnic militia.
An Associated Press reporter who visited the area saw a dozen white
men in black uniforms with “instructor” written on the back. The ones
speaking Afrikaans were presumably members of the rough-and-ready
corps of white South African former soldiers who signed up as mercenaries after apartheid and who are now to be found scattered across Africa,
guarding mines in Congo or attempting coups in Equatorial Guinea. Others were conversing in Hebrew.
Israel has long exported the prowess of its armed forces. Security firms
and mercenaries with ties to the Israeli Defence Forces conduct freelance assignments abroad. One of the highest-profile private security firms to
emerge from the Israeli military, Global CST, was founded in 2006 by Israel
Ziv, a retired major general who had commanded Israel’s paratroops and
the military’s Gaza division.34 Global CST’s website offers “tailor-made
unique solutions for every single client,” but in Colombia, where it won a
contract to help the government’s campaign against leftist rebels, a US diplomat concluded that “its proposals seem designed more to support Israeli
equipment and services sales than to meet in-country needs.”35 When Dadis took power in Guinea Ziv saw a man with whom he could do business.
A compatriot who had lived in Conakry for years, Victor Kenan, assisted
Ziv’s entry to Guinea. A tall, wiry, and well-connected diamond dealer who
traveled around Conakry in luxury vehicles with tinted windows, Kenan
worked as a fixer for Israeli companies coming to Guinea. “He’s a middleman for many Israeli companies for security—dark ones and good ones,”
one of his associates told me. “Kenan at the time of the military was very
strong.” When Dadis decided he wanted to stack the presidential guard
with members of his ethnic group and sharpen their combat skills, Kenan
was at hand to help arrange matters. Ziv then came to Conakry, and Global
CST was awarded a $10 million contract. The precise details of the work
the company did in Guinea—and the extent to which it knew the purpose
to which its services would ultimately be put—are still not clear, however.
By some accounts it provided training for Dadis’s ethnic militia. By others it also sold the junta military materiel.36 “The contract evolved into
training a professional presidential security detail,” Thiam told me. “The
people in charge of the recruitment were close to Dadis and from his ethnic
group and loaded the ranks with an overwhelming number of men from
their region.”37
Dadis’s personal army took shape, a combination of the presidential
guard and irregulars trained in the bush. The force had a clear enemy.
The biggest ethnic group in Guinea, accounting for about 40 percent of
the population and dwarfing Dadis’s people, is known in French as the
Peul. Its members belong to the broad, largely Islamic Fulani grouping
that stretches across to northern Nigeria. Many of the demonstrators who
gathered at the national stadium were Peul, as was Cellou Dalein Diallo,
the opposition leader regarded as the favorite to win an election if Dadis
agreed to stand aside.
The first sign the protesters had of what was about to befall them was
the volley of teargas that announced the presence of a contingent of police,
soldiers, and militiamen, several hundred strong, who had surrounded the
stadium. Just after noon members of the presidential guard, wearing the
trademark red berets matching their ruler’s, led the way through the main
entrance, at the command of Dadis’s chief bodyguard.
Packed into the stadium, the unarmed demonstrators were fish in a barrel. Bullets ripped into their bodies. Some were trampled to death in the
stampede to escape. Others survived by hiding for hours in the stadium’s
changing rooms, listening to the screams outside. Dozens of women were
raped in public, some dragged away to be kept for days as sex slaves. Between being raped for a first and second time on the pitch, one woman
turned to see the red beret who had just violated her friend shoot his victim in the head at point-blank range. At least 156 people were killed, and
more than 1,000 injured. Dadis’s loyalists, perceiving them as the main
threat to his power, singled out the Peul, as well as anyone who shared
the lighter skin tone for which the Peul are known.38 “We’re tired of your
tricks,” presidential guards told one young woman as they gang-raped her.
“We’re going to finish all the Peul.”39
Researchers from Human Rights Watch, who compiled a comprehensive account of the massacre, concluded that the atrocities were “organized
and premeditated.” World powers cast the junta into the wilderness. The
Economic Community of West African States (Ecowas) declared an arms
embargo, and the European Union imposed sanctions on a few dozen
senior members of the junta and its civilian government, including Mahmoud Thiam.
Thiam returned from his trip to Paris to “a very tense and fragile situation” in Conakry. He recalled that he and a small group of senior ministers and soldiers had to keep a round-the-clock watch on Dadis “because
hawkish and panicking soldiers and officers constantly gave him alarmist
false reports of ethnic rebels, mercenaries, and foreign troops invading. If
we were not there to diffuse the situation, a civilian massacre could have
started at any moment.”40
When I called Thiam a few days after the bloodshed at the national
stadium he sounded rattled and said he wasn’t comfortable discussing
the massacre. He was, however, happy to talk about the latest deal he had struck. Guinea might have become an international pariah, but there were
still those ready and willing to do business with the junta.
Thiam’s talks with Sam Pa and Lo Fong-hung had come to fruition. In
the coming days, Thiam told me, the Queensway Group, through China
International Fund, would announce joint ventures with the Guinean state
that would undertake projects in mining, energy, and infrastructure. The
whole package would be worth $7 billion, equivalent to one and a half
times the size of Guinea’s economy. China International Fund was to be
paid for the infrastructure projects with revenues from mining concessions
the government would grant it. Manuel Vicente’s ties to the Queensway
Group and to Mahmoud Thiam were rewarded too: China Sonangol, 30
percent owned by the Angolan state oil group that Vicente headed, would
receive rights to two-thirds of Guinea’s offshore acreage, where the potential for oil had greatly increased following recent finds in neighboring
waters.
Thiam rattled off a shopping list of laudable programs to be undertaken:
“lower-income and middle-income housing, an airline, et cetera, et cetera.”
But the deal’s most notable effect was to throw a lifeline to Dadis’s junta,
which faced financial asphyxiation through the sanctions that followed the
massacre. The agreement, which a top official from a previous government
described to me as “rapid and unorthodox,” was signed on October 10,
twelve days after the massacre. A November 19 cable from the US embassy
in Paris expressing fears about arms shipments and the South African and
Israeli trainers helping Dadis to hone his fighting forces noted “the significant funds that are available to the junta, including the $100 million-plus
‘security deposit’ from the Chinese International Fund (CIF).”41
Thiam confirmed to me later that the Queensway Group had indeed
moved $100 million into Guinea in the junta’s hour of need: $50 million to
be used for the first projects envisioned under its $7 billion deal and another $50 million to be deposited at the central bank to prop up Guinea’s
quickly dwindling reserves of foreign currency.42 I got hold of the confidential documents setting out the deal, which revealed that the Queensway Group had agreed to transfer cash to the junta by immediately buying
some of Guinea’s shares in the Singapore-based joint venture they had
formed. It had also provided a $3.3 million loan to fund an audit of the
bauxite mining operations of Oleg Deripaska’s Rusal, which Thiam would use in his efforts to squeeze some money out of the Russian oligarch, with a
stipulation that China Sonangol would get a 2 percent cut of any proceeds
that Rusal agreed to pay Guinea.43 (Rusal contested Thiam’s allegations,
and in 2014 an international tribunal ruled in the company’s favor.44)
Foreign powers heaped opprobrium on Dadis, but the combined effects
of terrifying violence at home and resource-industry deal making abroad
were keeping his junta intact. Then, one Thursday evening in December
2009, as his reign approached its first anniversary, Dadis’s bodyguard shot
him in the head.
Lieutenant Aboubacar Diakité, known as Toumba, had scarcely left Dadis’s side since he took power. A fellow young officer, he served as chief
bodyguard, aide-de-camp, and commander of the red berets, the elite presidential guard whose ranks were swelling with recruits from Dadis’s tribe.
On the day of the massacre Toumba had led the rampaging troops into
the stadium. A witness said Toumba had declared, as he opened fire on
the demonstrators, “I want no survivors. Kill them all. They think we have
a democracy here.”45 In the aftermath of the slaughter at the stadium the
prosecutor of the International Criminal Court opened a file on the massacre. A UN commission of investigation arrived in Guinea to piece together
what had happened and who was responsible. Toumba began to suspect
that Dadis was maneuvering to put the blame for the atrocities solely on
him.46 On December 3, while he and Dadis were at a barracks on Conakry,
Toumba aimed and fired.
The bullet struck Dadis in the head, but the man who had spilt so much
blood at the national stadium would be denied another scalp: the injuries
were not fatal. Dadis was evacuated for treatment in Morocco and remained
in exile. Toumba fled into hiding. The junta’s deputy leader, an imposing
senior officer, took over and promised to give power back to the people.
If the giant cake reminded any of the luminaries present of Marie Antoinette, they didn’t let on. Decked out in the national colors of red, green,
and gold, the confection had been baked to celebrate the launch of Guinea’s flag carrier, a new airline to replace the one that had gone bust a decade earlier. Ministers and businessmen who had gathered in a function room of the Novotel in Conakry chatted and applauded. It was a moment
for patriotic self-congratulation. Guinea was still a case study in deprivation, but the ruling class had restored a little pride by resurrecting the national airline. There were speeches and a buffet. The German-Egyptian
pilot, an alumnus of Thomas Cook Airlines who had been brought in as
chief executive of Air Guinée International, said a few words. So did the
minister of transport. Although the new carrier’s fleet of Airbus A320s had
been delayed by a few months, the minister explained, miniature replicas
had been produced to allow the launch party to go ahead.
Six months after the attempted assassination that had forced Dadis into
exile the first competitive elections in Guinea’s history were days away, and
only civilians would be competing. The frontrunners had all pledged to
scrutinize—and perhaps rip up—the business deals the junta had struck.
Nonetheless, at the gathering at the Novotel there was a certain confidence
among the officials and investors who had thrown in their lot with the
men in uniform. Mahmoud Thiam looked assured as he worked the room.
So did another man, who preferred to stay on the sidelines: Jack Cheung
Chun Fai, the representative of China International Fund, the airline’s financial backer.
Like other companies hoping to protect their interests once the military
yielded the presidency to an elected leader, the Queensway Group had
been hedging its bets. The wife of one of the most fancied candidates in the
election, Cellou Dalein Diallo, had been appointed deputy chief executive
of Air Guinée International.47 China International Fund had made a start
on other infrastructure projects that were the quid pro quo of its mining
rights, commencing the construction of two power plants and shipping
in rolling stock for a railway.48 Even as its designs on Guinea’s minerals
were taking shape, the group said little in public (much like Jack Cheung,
who refused to answer my questions when I approached him at the airline
launch). A mining executive at another company with interests in Guinea
described China International Fund as a “ghost.”
Thiam was planning to head back to New York once a civilian president
was sworn in. Reclining on a sofa beneath the high ceilings of his grace and-favor ministerial apartment, he was content with his tumultuous eighteen months in office. He told me he had set projects in motion that would turn Guinea into the world’s biggest iron ore exporter within a decade.
Added to its status as a major source of bauxite, that would make Guinea
a lynchpin of the global industrial economy. Thiam’s work was complete:
“Nothing that we have done is reversible.”49
Down below on the streets of Conakry, popular expectations that the
vote would transform Guineans’ miserable lot were running preposterously high. “Everything will change,” Rafiu Diallo, a twenty-one-year-old
selling secondhand shoes by the roadside, told me breathlessly. “Government will change; life will change. We will sell more shoes; people will
have more money,” he said, vigorously buffing a pair of cheap heels. Diallo confidently predicted that a civilian government would be good for
business, allowing him to increase his daily turnover from its current level
of 25,000 Guinean francs, or about $4. More importantly Guinea’s rulers
would henceforth be answerable to Guinea’s people, Diallo believed. “It
will be a government of our will.”
When I met Alpha Condé at a hotel in Paris in November 2013 he was
halfway through his term as Guinea’s elected president. Condé had spent
long stretches of his adult life in France, including a stint as a law professor at the Sorbonne, in self-imposed exile from his homeland, where he
had agitated first for independence then against successive tyrants. Sekou
Touré sentenced him to death in absentia; after Condé went home Lansana Conté had slung him in jail. Now seventy-five, he was back in France
as president and squeezing in an interview with me between meetings with
French ministers, a sign of Guinea’s readmission to the international fold.
Condé had surprising energy for his age. His aides told stories of being left dripping with sweat trying to keep up with him on walkabouts
in Conakry. But the presidency was a heavy burden. Between posing for
photographs, he shifted from foot to foot, his expression brightening only
when the conversation turned briefly to football. (France had scraped
through to World Cup qualification that week; Guinea had long since been
eliminated.)
Before the presidency Condé had never held government office. His
supporters did not doubt his sincerity but conceded that, at first, he was
out of his depth. His opponents were still questioning his election victory. The shambolic polls had produced no clear winner in the first round, and
after long delays, during which rivals’ supporters traded blows and allegations of foul play, Condé, a Malinke, came from a long way behind to
beat Diallo in the runoff, dashing Peul hopes of victory for their candidate.
Foreign election observers gave the vote a cautious blessing, and in December 2010, fifty-two years, two months, and nineteen days after Guinea’s
declaration of independence, Condé was sworn in.
Condé’s task was fraught with peril. The dangers of his efforts to reform
a military that had grown accustomed to being above the law became apparent six months into his presidency, when renegade soldiers attacked
his private residence with rocket-propelled grenades.50 He won debt relief from Guinea’s international creditors, brought down inflation, and
attracted investors, but the poverty of a resource state is not overturned
in a couple of years. He had some influential foreign friends—George Soros, the Hungarian-born billionaire hedge fund manager and philanthropist, and Tony Blair, the former British prime minister, were among his
advisers—but at home Guinea’s ethnic divisions remained wide, periodically erupting into clashes. Some of the high hopes that the new president
would change the way business is done in Guinea, especially in the mining
sector, diminished as his term drew on. Condé had pledged to break with
the corruption of the past, but new scandals emerged on his watch.51
Condé’s biggest battle, at least in terms of the sums of money involved
and the corporate firepower of those he antagonized, was over Guinea’s
minerals. Inheriting a country ranked among the world’s most corrupt,
Condé espoused a philosophy promoted by one of his advisers, George
Soros, who was among the most prominent advocates of “transparency”
in the oil and mining industries—the theory that publishing contracts
and revenues would reduce corruption and raise the state’s accountability. Guinea’s $7 billion oil, mining, and infrastructure agreement with the
Queensway Group was quietly ditched. The president appointed an inquiry to review mining deals struck under past dictatorships. One deal in
particular would pitch Condé into a struggle between some of the most
powerful forces in the resources business.
In the final months of the junta’s rule BSGR had struck a sensational
deal. Even by the standards of Beny Steinmetz, it was the deal of a lifetime.
BSGR reached an agreement to sell to Vale, the Brazilian group that mines more iron ore than any other company, a 51 percent share in BSGR’s Guinean assets, which included the northern half of the bounteous deposit at
Simandou—for $2.5 billion. BSGR had paid nothing for its mining rights
(companies typically promise to invest to bring the seams into production
and pay taxes on royalties on them rather than paying fees at the outset)
and had spent, according to the company’s public statements, $160 million
on preliminary work on its prospects. Vale paid $500 million up front for
its stake, immediately securing for BSGR close to a threefold return on
its investment. The balance was due to follow as targets were met. One
long-serving expatriate in the Guinean mining game shook his head in
envy over a beer in downtown Conakry and declared that Steinmetz had
won “the jackpot.”
Mahmoud Thiam had sanctioned the deal, but Alpha Condé’s new government suspected something was awry in the way BSGR had acquired its
mining rights in the first place. It instructed Vale and BSGR to suspend
work and hired Scott Horton, an experienced lawyer from the US law firm
DLA Piper who specialized in investigating corruption and human rights
abuses, to look into BSGR’s activities. Horton and his team compiled
a dossier, including an account of what the investigators thought was a
scheme to bribe the old dictator’s wife, Mamadie Touré. In October 2012
the chairman of Guinea’s inquiry into past mining deals wrote to BSGR,
laying out the accusations and inviting the company to respond.
BSGR launched a counterattack. A tussle over a remote stretch of west
African mountainside became a war of words—and writs—between some
of the most illustrious members of the global elite. BSGR’s representatives
depicted a nimble, daring company that would have delivered a windfall
for the Guinean people had the government not decided to confiscate its
assets illicitly. The company had not been corrupt, merely fortunate, it argued. “It’s roulette,” Steinmetz said of the mining business in an interview.
Companies that are prepared to gamble and work hard sometimes “get
lucky.”52
BSGR maintained that it was the victim of a conspiracy orchestrated by,
among others, George Soros, who in addition to being an adviser to Condé,
was also a major donor to Revenue Watch, a transparency organization
that was assisting Guinea with its mining reforms; Soros also gave money
to the anticorruption group Global Witness, which published reports on the bribery allegations. The result, BSGR’s representatives claimed, was
“a coordinated but crude smear campaign.”53 Beny Steinmetz sued the
public relations firm FTI Consulting, which had dropped BSGR as a client after the corruption allegations came out, and its chairman for Europe,
Middle East, and Africa, the British peer Mark Malloch-Brown, accusing
him of being in league with Soros, for whom Malloch-Brown had once
worked. The case was settled out of court.54
BSGR retained the London law firm Mishcon de Reya as well as Powerscourt, a London public relations company founded by Rory Godson, a
former business editor of the Sunday Times, to take the fight to its critics—
with Alpha Condé firmly in their sights. His government, BSGR’s representatives said, was “illegitimate,” a “discredited regime.”55 The inquiry
into past contracts “defied all notions of due process.” (Mahmoud Thiam
called the probe a “witch hunt” that served only to stymie investment and
claimed that private investigators had been going through his bins.56) The
contracts purporting to set out the bribes to be paid to Mamadie Touré
were fakes, BSGR said, and it had been “the victim of numerous extortion
attempts by individuals who were seeking economic gains” involving “the
use of forged documentation, blackmail and harassment.” (When in 2014
I asked BSGR to provide details of the alleged extortion, it declined to do
so.) In short, the company said, “BSGR is confident that its activities and
position in Guinea will be fully vindicated.”57
Alpha Condé was determined to stay the course. “It’s not easy,” he told
me in Paris. “With fifty years of misrule, of corruption, bad habits have set
in. Habits built up over fifty years are not changed in two or three days.
Time is also against us: the people are impatient. They want to see something concrete.” I suggested to him that Guinea was being used as a laboratory for transparency in mining, an admirable notion if fully implemented
but one that ran counter to the secrecy that companies and resource-rich
governments had long cherished. “That exposes me to a great deal of risk,
politically and personally,” Condé replied. “But in life you have to take
risks.”58
What Frederic Cilins had not known when he sat down with Mamadie
Touré in April 2013 to try to persuade her to destroy the contracts promising her cash and shares for helping BSGR and to catch a plane out
of the United States was that the FBI was listening in. When she arrived in
Florida following Lansana Conté’s death, the dictator’s widow had bought
what Americans disparagingly call a “McMansion,” a luxurious residence
built with more grandeur than taste.59 Once Alpha Condé took power, the
investigation he launched into how BSGR had won its rights followed the
trail to her doorstep. The investigators whom Guinea’s new government
had hired to conduct the probe shared what they had discovered with US
prosecutors, who, in early 2013, convened a grand jury and pressed ahead
with their own investigation.
When FBI agents confronted Touré, her options were stark: deny everything and face jail if she were convicted or give the FBI what it wanted in
the hope of being granted immunity or at least a reduced sentence. When
Cilins got in touch Touré agreed for her phone to be tapped; when she
went to meet him at Jacksonville airport she was wearing a wire and FBI
agents were discreetly watching. When they had heard what they needed
to, one of them walked over to the Frenchman and arrested him. He spent
the next year in jail and was moved to New York, where the grand jury was
sitting to assess the merits of issuing corruption and money laundering indictments connected to BSGR’s activities in Guinea. A judge granted him
permission to conduct forensic tests on the contracts that his lawyers, like
BSGR, claimed were fakes, but then, in March 2014, three weeks before he
was due to go on trial, Cilins pleaded guilty to obstruction of justice.60 In
July he was sentenced to two years in prison, including time served. He
was fined $75,000, and he forfeited the $20,000 he was carrying when he
was arrested.61
The investigation into BSGR’s Guinean dealings spread across three
continents. The company is registered in Guernsey, but its directors and
executives operate out of offices in Mayfair and Geneva, where Steinmetz
lives. Prosecutors in Switzerland responded to a request for legal cooperation from Guinea and then opened their own investigation. They interviewed Beny Steinmetz twice; Swiss police searched his house and private
jet and raided offices connected with BSGR. At the time of writing neither
BSGR nor Steinmetz has been charged either in the United States or in
Switzerland (or, for that matter, anywhere else). In a one-line statement after Cilins—who, as they emphasized, had worked with BSGR as an intermediary, not an employee—pleaded guilty their representatives said,
“As we have been saying all along, no one at BSGR has done anything
wrong.”62
Steinmetz’s representatives say that he is only formally an adviser to the
company that bears his initials and of which, through complex layers of
trusts and offshore companies, he is the main financial beneficiary.63 But,
as documents published by Guinea’s mining inquiry indicated, Steinmetz
played more than an advisory role in Guinea.
In a sworn statement submitted to the Guinean inquiry Mamadie Touré
said Steinmetz had attended meetings, including one in June 2007, that
she arranged between her husband and other emissaries from BSGR, had
discussed her lobbying efforts with her, and had been personally involved
in striking the agreements under which she would be given cash and shares
as a reward for helping the company.64 BSGR denounced her account as “a
wholly incredible and unsupported version of events related by a witness
who has sought to extort money from BSGR in the past” but declined,
when I asked the company for more details, to elaborate on the alleged
extortion.65 In April 2014 a person close to the company, who declined to
be named, called to tell me, “Beny Steinmetz looks forward to proving with
passports and other evidence that he never set foot in Guinea until 2008.”
That contradicted references in Touré’s statement to meetings earlier than
2008. (Steinmetz’s representatives declined to elaborate on what he did in
Guinea in 2008.)
There were other suggestions of Steinmetz’s involvement. During one
of Frederic Cilins’s taped conversations with Mamadie Touré he said the
details of how much money he could offer her to destroy the evidence had
been “given to me directly by Number One, I don’t even want to give his
name.” When Touré asked who he meant, Cilins whispered, “Beny.” Cilins said he had been to see Steinmetz before coming to Florida and that
Steinmetz had told him, “Do what you want, but I want you to tell me . . .
‘It’s over. There are no more documents.’”66 In 2014, after Guinea’s mining
inquiry published its findings, I asked BSGR’s representatives about this
account of events that Cilins unwittingly gave to the FBI. They declined to
answer my questions, as did Cilins’s lawyer.
In east Africa they have a saying: “When elephants fight, the grass gets
trampled.” The big beasts of the mining industry as well as its own Big
Men have thoroughly trampled Guinea. In April 2014 Alpha Condé’s
government canceled BSGR’s rights after the two-year inquiry into past
mining deals concluded that there was “precise and consistent evidence
establishing with sufficient certainty the existence of corrupt practices” in
the way the company had won them.67 That prompted the elephants to
stampede.
Echoing Cobalt International Energy’s protestations of ignorance over
the Angolan officials’ concealed stake in its oil venture, Vale’s head office
in Rio de Janeiro put out a statement saying that the company had struck
its deal with BSGR “after the completion of extensive due diligence conducted by outside professional advisors and on the basis of representations
that BSGR had obtained its mining rights lawfully and without any corrupt or improper promises or payments.”68 With the rights that Vale held
jointly with BSGR annulled, one of the foremost deals in Brazil’s thrust
into Africa—which, like India’s, generated fewer headlines than the Chinese advance but was nonetheless a concerted effort to secure oil, minerals,
and markets—was in tatters. Vale had paid BSGR the initial $500 million
fee for its stake but had withheld the outstanding $2 billion. Nonetheless,
factoring in the money it had spent working on the project, Vale had lost
$1.1 billion.
While Guinea battled the early stages of an outbreak of the deadly Ebola
virus in April 2014 the battle for Simandou moved to courtrooms in far-off
lands. Vale declared that it was “actively considering its legal rights and
options” after BSGR had assured it that there had been nothing remiss
about the way it had won its rights. BSGR hauled Guinea to international
arbitration. And Rio Tinto filed a lawsuit in New York against Vale, Beny
Steinmetz, BSGR, Mahmoud Thiam, Frederic Cilins, Mamadie Touré,
and others, accusing them all of complicity in a conspiracy stretching back
to 2008 to “steal” the northern half of Simandou. Rio said the racket had
cost it billions of dollars and demanded damages. At the time of writing, no
defenses had been filed, but BSGR, Steinmetz, and Thiam strongly denied
the allegations, and Vale stressed that it had been cleared of wrongdoing by
Guinea’s inquiry.69
All the while Guinea’s most valuable national asset remained stuck under a mountain, with the railway to carry the ore across the country unlaid and the port to ship it off to the steel mills of the world unbuilt. As
billions of dollars changed hands among the titans of the mining industry,
Guinea (annual budget: $1.5 billion) had nothing to show for being the
place where the ore actually lay.
Guinea has made some money from Simandou—the $700 million that
Rio Tinto paid the government after Alpha Condé took office to settle “the
resolution of all outstanding issues” pertaining to its remaining half of the
deposit and to secure exemption from Guinea’s mining review “or any future reviews.”70 The sum was equivalent to half of the $1.35 billion that
Chinalco, one of China’s biggest state-owned mining houses, had agreed
to pay Rio for a stake in its portion of Simandou a year earlier, while the
junta was still in power.71
When it settled with Guinea, Rio promised to bring a mine into production by 2015. But the deadline slipped and slipped again. The mining
giants appeared more determined to plant their flag in the mountain than
to mine it. Vale and Rio already controlled the world’s two most important
stocks of iron ore—in Brazil and Australia, respectively—and a rush of new
ore onto the market from Simandou could bring down prices and make
those other projects less lucrative. At the same time, although building a
mine and the required infrastructure might cost a forbidding $20 billion,
neither of the iron ore trade’s two great rivals wanted to cede control of the
mountain to the other. At the time of writing, with iron ore prices falling,
few expected mining to start at Simandou much before the end of the decade, if then.
After Guinea’s inquiry found that it was not “likely” that Vale had participated in corruption, it recommended that only BSGR—not Vale—be
banned from bidding when the rights to the northern half of Simandou
were made available again.72 That left both Rio and Vale free to bid, alongside any other mining house that wanted to join the fray. “This is a battle
to the death for control of Simandou, with the clear understanding that the
firm that controls it also has a dominant position in the iron industry for
a generation to come,” someone close to Alpha Condé’s government told
me when Rio Tinto filed its lawsuit against Vale. “This suit can only be understood in the context of that struggle—over the future of Simandou,
not really over history.”
Even if Simandou goes into production and starts to generate billions
of dollars in government revenue, it is dangerous to assume that a flood of
resource rent would be a panacea for Guinea. Elsewhere such rents have
proved ruinous. The Guinean government’s 2012 economic policy blueprint, agreed with the International Monetary Fund shortly before Guinea’s creditors forgave $2.1 billion of debt, warned of “the adverse impact
the rapid development of the mining sector could have on the other sectors
of the economy through the ‘Dutch disease’ syndrome.”73 Harry Snoek,
the Guinea mission chief for the IMF—who was, as a Dutchman, well
aware of the damage that his country’s eponymous economic malady can
do—told me, “Like the rest of the region, it’s going to be a major challenge
for Guinea to benefit from these resources.”74
The elephants of the mining and oil industries have stomped on Africa
since long before independence. Since the turn of the century a new beast
has entered the arena. It came with a promise to muscle out the old colonial herd, to beat a new trail out of enslavement to natural resources. But
if you are grass in the path of powerful creatures, it makes precious little
difference which feet are doing the trampling.
6
A Bridge to Beijing
Niger’s presidential palace lies on a leafy boulevard in Niamey, the
capital of the world’s poorest country, not far from where the River
Niger snakes beneath bridges trod by nomads and their lolloping camels.
By day the desert sun scorches the city. By night the only light on the sandy
backstreets comes from gas lamps and fluttering candles. On the morning
of February 18, 2010, President Mamadou Tandja received his ministers
at the palace for the weekly cabinet meeting. There was much to discuss.
Hunger was once again stalking this landlocked nation on the arid southern fringe of the Sahara. But that was not the main reason why the mood
in Niger was tense. Tandja, a shepherd’s son and former army colonel, had
been the first president in Niger’s history to have won successive elections,
quite a feat in a country with a knack for coups. But of late his attachment to democracy had waned. His term in office should have expired two
months earlier, yet he showed no sign of departing.
The first signs that Tandja was heading in the direction of west Africa’s pantheon of autocrats had come in late 2008 at a ceremony to lay the
foundations for the country’s first oil refinery. A band of Tandja supporters staged a demonstration demanding that he extend his rule beyond its
constitutional limit. The partisans wore T-shirts bearing the president’s
face and emblazoned with a single word in Hausa: tazartché—continuity. More rallies followed, ostensibly spontaneous and driven by popular sentiment but also attended by senior allies of the president. Tandja
declared that the people had spoken. He had work to do, and this was
no time to leave office. When Niger’s constitutional court ruled that the
president was acting illegally, he ignored the justices. When they persisted in opposing him, he dissolved the court. The national assembly objected
to his plans for a referendum on a new constitution without term limits, so
he dissolved that too and began to rule by decree. An opposition boycott
of the referendum, held in August 2009, meant Tandja recorded an overwhelming victory.
International condemnation rained down. The regional bloc, Ecowas, is
hardly a club of democrats, but it tends to draw the line at the overt accumulation of untrammeled power. Niger’s membership was suspended. Donors cut aid. France led Western powers in their outcry. Bernard Kouchner, the French foreign minister, declared that “it is necessary to respect
and return to the constitutional order.”1
Few argued with the sentiment, but France had an ulterior motive for
condemning Tandja. He had thumbed his nose at Niger’s former colonial master. For decades France had enjoyed a de facto monopoly on
the stuff that makes Niger a place of strategic importance—its uranium.
France consumes more uranium than any country apart from the United
States. Nuclear power stations supply three-quarters of France’s electricity. Areva, the French state-owned atomic energy group, held sway over
the stretches of northern Niger under which lie some of the planet’s richest
seams of uranium. Areva mines about a third of its uranium in Niger, with
the rest coming from Canada and Kazakhstan. It is the world’s biggest nuclear company, and its annual revenues are twice Niger’s gross domestic
product. But Tandja had taken it on, breaking Areva’s monopoly, driving
a harder bargain, and handing uranium permits to companies from half a
dozen other countries. The relationship soured to the point that Areva was
accused of colluding with the Tuareg rebels of the North, and two of its
employees were ejected from the country.
To break with France so brazenly, Tandja needed an alternative
ally among the world powers. He found one in the country with the
fastest-growing nuclear industry: China.
In return for permits to dig for uranium and rights to drill Niger’s previously untapped reservoirs of oil, China furnished Tandja with the means
to indulge his authoritarian streak. Of the $56 million that Sino-U, China’s
answer to Areva, paid for its license to mine uranium in Niger, $47 million
was spent on arms to suppress the Tuareg rebels, according to Ali Idrissa, a local anti corruption activist.2
A far greater sum—$300 million—arrived
in the form of a signature payment when Tandja granted China National
Petroleum Corporation, China’s second giant national oil company alongside Sinopec, rights to develop an oil block that Western companies had
spurned. “It was because Tandja had Chinese money that he felt he could
mock the EU, Ecowas, the US,” Mohamed Bazoum, a leading member of
the political opposition to Tandja, told me.3
“He wanted to be the king of
Niger.” There were other sources of funds too. During Tandja’s decade
in power, an inquiry would later find, $180 million vanished from Niger’s
state coffers through embezzlement and corruption.4
Tandja steamrolled the institutions designed to check the president’s
powers, caring little for the discontent that was brewing on the streets and
in the barracks. But if he thought having China in his corner meant Beijing
would help in his hour of need, he was mistaken. His cabinet meeting was
in session when the shooting started. Soon a plume of smoke was rising
from the presidential palace. At least three people lay dead.5
A band of
rebel soldiers had secured the palace and taken Tandja and his ministers
captive.
The military coup against Tandja deepened fears in Africa that China’s
competition with the old powers for the continent’s resources was giving rise to a new and ruinous rivalry like that of the Cold War, which had
allowed dictators to play Communist and capitalist suitors against one
another.
This, however, was a coup—and a rivalry—with roots not in ideology
but in the pursuit of economic interests, specifically control of natural resources. Perhaps it was always this way. In Angola the Cold War at times
looked more like some ultra-violent version of Alice in Wonderland, with
Cuban troops fighting to protect oil facilities run by an American company, the revenue from which sustained a Communist government whose
rebel opponents enjoyed the support of Washington and its ally, apartheid South Africa.6
Now, however, Beijing was offering Niger and other
African states a genuinely new bargain: infrastructure without interference. China proposed to build roads and ports and refineries on a scale scarcely countenanced by the European colonizers or the cold warriors.
In exchange it sought not allegiance to a creed so much as access to oil,
minerals, and markets.
For a country like Niger, such an offer was tempting. Uranium may be the
only commodity to rival oil for strategic import, both for its use in nuclear
energy and in nuclear weapons, but you cannot eat it. When I arrived in
Niger in the wake of the coup, after passing through the smuggling domain
of Dahiru Mangal in northern Nigeria with its godforsaken border post, I
visited the feeding stations of the south. Poor rains and a rise in food prices
had consigned millions to the latest of Niger’s periodic bouts of starvation.
One impossibly spindly three-year-old I encountered, his skin tight over
his skeleton as he stared at the ceiling from his bed, weighed about half as
much as he should have. Had he been made of uranium ore, he would have
been worth $700. Instead, he looked certain to end up among the one in
eight Nigerien children who die before the age of five. As in eastern Congo,
the emaciated youngsters were a silent—or softly whimpering—rebuke to
the presence of great natural wealth beside the most basic failures to sustain human life.
Faced with such deprivation, the prospect of massive Chinese investment to spur the development of a more robust economy was enticing—all
the more so when there was next to nothing to show for decades of Western imperial domination and postcolonial commercial exploitation.
Audiences with Chinese emissaries to Africa are rare, but I had a hunch
that Beijing’s man in Niamey might be keen to speak out, given that the
abrupt end to Tandja’s rule threatened China’s newfound access to Nigerien uranium and crude. I was shown into a well-appointed meeting room
in the Chinese embassy, a refuge from the intense heat outside. Inside was
a wall-length painting of the Three Gorges, the site of the hydroelectric
dam that produces almost as much electricity as the whole of sub-Saharan
Africa, excluding South Africa. It might have been an advertisement for the
enormity of what the most populous nation could offer the most impoverished continent.
In strode Xia Huang, a graceful, assured man who had previously been
posted in Paris and spoke impeccable French. The ambassador chose his
words with care, but his message was clear. “There has been exploitation of uranium in this country for nearly forty years,” Xia said.7
“But when
one sees that the direct receipts from uranium are more or less equivalent
to those from the export of onions each year, there’s a problem. Uranium
is a strategic energy resource, very important. When one sees this equation, there’s a big problem. China’s presence here, on this continent, the
fact that China is engaged in exploration projects, in production projects,
in projects of transformation—that gives another option to African countries.” Did he mean that China was proffering an alternative to what the
West offered, I asked. The diplomat chuckled, wary of departing too far
from the script that depicts China’s rise as unthreatening to the old powers. “No, I’m just saying ‘another option’: perhaps a more lucrative option,
a more profitable option for their economic development and their social
progress.”
China, Xia said, was providing Niger and other African countries a
route to true economic progress. Rather than continually being reduced
to haggling over the terms at which foreigners carried off their natural resources, these countries could begin to industrialize, using Chinese-built
infrastructure as the bedrock for their own manufacturing base—in other
words, an antidote to Dutch Disease. “Industrialization,” the ambassador
declared, “is an unavoidable step for this country to emerge from poverty.”
The Chinese message was not lost on the Nigeriens. Although there
were the same complaints that followed Chinese companies around
Africa—that they imported their own labor or, when they employed locals,
did so for poor pay and in poor conditions—there were also tangible signs
that China was turning its promises into bricks and mortar in Niger. Under
Tandja the Chinese had built a second bridge over the River Niger and a
hydroelectric dam to harness its power, and Chinese state companies had
launched a $5 billion project to drill Niger’s first crude from the Agadem
oil block and construct Niger’s first refinery, improbably turning a landlocked zone of penury into one of the few west African countries able to
start to move away from the economic lunacy of exporting crude while
shipping in refined petroleum products or relying on bootleg fuel.
There was a frisson of excitement that, at last, someone was interested in doing more than agreeing to fund a few token community projects to accompany massive mines. The president of Niger’s chamber of commerce, Ibrahim Iddi Ango, was one of the converts, albeit a cautious
one. A thoughtful industrialist with investments in telecoms, cement, and
insurance, he, like other Nigerien businessmen and politicians I spoke to,
was delighted by China’s readiness to do what Western companies had
told Niger could not be done. Over the years Elf, the French forerunner to
Total, Exxon of the United States, and other oil majors had been granted
rights to assess the Agadem oil block. “Each time the government said,
‘You want the oil? Build a refinery,’” Iddi Ango told me.8
“Each time they
said it was impossible. The Chinese came and said, ‘You want a refinery?
What size?’”
China was offering the states of Africa a helping hand in emulating its
own transformation. Compared with the substantial share of the world’s
supplies of diamonds, gold, energy, and metals Africa has yielded over
more than a century, the continent has received a paltry return in terms of
the basic architecture of economic progress. In 2008 sub-Saharan Africa,
with a population of 900 million, produced as much electricity as Spain,
with a population of 47 million.9
When economists compared data for 2001
for all poor countries they found that those outside Africa had an average
of 134 kilometers of paved roads for every 1,000 square kilometers of land;
in Africa the figure was 31 kilometers (countries outside Africa classed as
“upper-middle income” had 781 kilometers).10 Over the decades since the
European empires dissolved, other parts of the world have hauled themselves from poverty by industrializing, outstripping a continent that has
largely been left without the means to become anything more in economic
terms than a source of exported raw commodities. In 1970 sub-Saharan
Africa had three times as much electricity capacity per million people as
south Asia. By the turn of the century, after three decades during which
African oil, gas, and other fuels had fired the power stations of the world,
south Asia had twice as much electricity capacity per million people as
sub-Saharan Africa.11 The World Bank estimated in 2010 that Africa needs
$93 billion—equivalent to the cost of six London 2012 Olympic Games—
every year to meet its infrastructure needs, more than double the current
outlay.12
In the years following its first pact with Angola in 2004 Beijing struck
similar multibillion-dollar resources-for-infrastructure deals in Congo and
Sudan and spread its largesse into every corner of the continent. A third of all Chinese overseas contracts are in Africa. In recent years Chinese funding has accounted for two-thirds of Africa’s spending on infrastructure.13
By 2007 China had signed up to provide the bulk of the finance for ten major African hydroelectric dams, which, between them, represented a third
of the continent’s entire electricity capacity.14
Some vaunted transport undertakings, such as a Mauritanian railway,
failed to materialize, and there have been reports of rain washing away
shoddy Chinese-built roads. Nonetheless, the quality of Chinese construction work in Africa has improved over the decade since Beijing began its
courtship. In Ethiopia mobile phone calls buzz along Chinese cables, and
cargo pours through a Chinese-built airport. The tallest building in the
capital, Addis Ababa, completed in 2012 at the cost of $200 million, is the
new headquarters of the African Union, a magnificent curved edifice that
stands as the emblem of China’s African ambition.
Beijing picked up the bill for the AU headquarters. For other projects
Chinese state-owned banks have provided much of the credit through
which African governments finance infrastructure projects. These Chinese
loans have interest rates higher than what traditional donors like the World
Bank offer but lower than those available from commercial banks. Often, as
in Angola, the repayments are not in cash but in natural resources.
The sums of money at China’s disposal are stupendous. A senior manager at China’s state-owned Exim Bank, the source of most Chinese finance to Africa, predicted in 2013 that the Chinese state would, by 2025,
channel a trillion dollars to Africa in investments and loans, the equivalent
of three-quarters of the entire gross domestic product of sub-Saharan Africa in 2013. “We have plenty of money to spend,” said Zhao Changhui,
one of the architects of China’s trade relations with Africa.15 The $3.5 trillion in foreign currency reserves that China has amassed as the world’s
largest exporter could not simply be parked in US government bonds, the
investment equivalent of sticking your cash under the mattress. “We need
to use part of them in overseas investments,” Zhao said. “Africa for the
next twenty years will be the single most important business destination
for many Chinese mega-corporations.”
Niger, with its oil, its uranium, and its president keen to shake off the
former colonizers’ shackles, was a prime target. Tandja’s descent into despotism and the coup that followed marked the first major political upheaval in Africa for which the roots could be traced directly to China’s challenge
to Western control of the continent’s resources. But it also demonstrated
that the new powers in Africa and the old had more in common than either
would care to admit.
It was Charles de Gaulle who devised the French system of influence over
its former African colonies. De Gaulle had led the exiled French government during World War II and became the towering statesman of postwar
French politics, assuming the presidency in 1958 as France was in tumult
and facing revolt in Algeria. He granted Algeria its sovereignty. To France’s
possessions in west Africa he offered a deal to which their leaders almost
universally acquiesced and under which they retained French protection
after independence at the price of preserving French economic interests
and letting Paris dictate foreign and defense policy. Such was de Gaulle’s
hold on French-speaking Africa’s growing band of post independence tyrants that, when he died in 1970, Jean-Bédel Bokassa, the self-styled emperor of the Central African Republic, sobbed at the funeral of a man he
called “Papa.”16
The French system in Africa, perpetuated primarily by Gaullists after
their leader’s death, developed into a network of resource deals, slush
funds, and corruption that its moniker neatly summarizes. To the eye,
Françafrique reads like a harmless amalgam of France and Afrique, suggesting two peoples joined in common cause. Spoken aloud, however, it
conjures something closer to the truth: France à fric—a play on the French
for “cash,” which might be loosely translated as “France’s cash machine.”
In its heyday Françafrique was indeed a mutually beneficial arrangement, only not one for the benefit of the population at large but for the
African autocrats and French mandarins who ran it. In the late 1990s an
indefatigable investigative magistrate in Paris called Eva Joly followed the
thread of some dubious transactions and discovered a huge, hidden pipeline of dirty money running through the African arm of Elf, the French
state oil company. “I felt like I was penetrating an unknown world, with
its own laws,” said the Norwegian-born Joly, who received death threats as
she delved deeper.17
Elf ’s division in Gabon was the center of this unknown world. It used
oil money to pay bribes to French politicians, buy luxury apartments in
Paris, and swell the fortune of Omar Bongo, under whom the Gabonese
endured abysmal living standards while their rulers were reputed to have
made the country the world’s biggest per capita consumer of champagne.
And Elf ’s tentacles spread beyond the francophone sphere as the oil company secured crude across Africa. A former Elf executive testified in 2000
that one beneficiary of the Elf slush fund was Angola’s José Eduardo dos
Santos.18 (Dos Santos denied the allegation.)
Joly’s investigation shook the French establishment, exposing a shadow
state to match any African regime in its readiness to trade access to resources for illicit influence and personal benefit. Elf was privatized and
its catacombs of corruption sealed off. Dozens of Elf employees went to
jail. French politicians, among them Nicolas Sarkozy, declared that the era
of Françafrique was over, and France’s direct influence over many of its
former colonies did indeed wane. But French corporate power in Africa
remained strong. Total, the privatized successor to Elf, which ranks alongside Exxon Mobil, BP, Shell, and the other giants of the industry, holds
some of the best oil rights in Angola and Nigeria, the continent’s two top
crude producers, and still pumps oil in Gabon.
In Niger, where Areva began operations two years before independence
in 1960, France has maintained its strategic interest in uranium through
systems that are, though strictly legal, hardly equitable.
Areva’s contracts are not published, but reporters from Reuters got
hold of its most recent decade-long agreements, which ran to the end of
2013. The documents showed that Areva was exempt from paying duties
both on the mining equipment it imported and the uranium it exported.
The royalty, a particular type of payment that mining companies make to
governments based on the quantity of minerals they extract, was 5.5 percent on the uranium it mined, well below that charged by other, wealthier
countries and locked in by a clause exempting the company from any increase in the rate under new mining laws.19 The mining industry defends
such stipulations as necessary so as to allow long-term investment. Nonetheless, a French expatriate in Niamey, discussing the anti-French feeling
on which Tandja had capitalized to whip up support for his burgeoning tyranny before the coup, encapsulated the antipathy that Areva’s miserly
terms engendered: “There’s a sense of neocolonialism, especially of Areva.
There’s a sense that France has no friends, only interests.”
The core of China’s offer to Niger as well as to other African resource
states was, as the ambassador explained to me, based on a contrast between
Beijing’s munificence and the niggardliness of the old powers. There are,
however, elements of China’s pursuit of African resources that replicate
the old tricks of the traditional lords of African resources. Beneath the
rhetoric of universal progress Beijing has proved just as willing as its European predecessors in Africa to use middlemen to cultivate personal ties
to the most influential members of the ruling classes who control access to
the continent’s oil and minerals.
The search for one of those middlemen led me to Niamey’s zoo. It lies
in the center of Niger’s sand-blown capital, close to the junction of Rue de
l’Uranium and Avenue Charles de Gaulle and not far from the presidential
palace where the soldiers toppled Tandja. When I visited, not long after
the coup, the hyenas were looking irritably mangy. A desiccated hippopotamus slouched in a shallow concrete bath. Schoolchildren squealed
with delight as a long-suffering ostrich quick-marched laps of its cage in
time with their clapping. The star attractions, the zoo’s seven lions, were
cramped. But better times lay ahead for them in the form of a planned new
eleven thousand–square-foot lion enclosure soon to be erected at a cost of
$60,000.
The lions’ benefactor was a consultancy called Trendfield, a company
registered in the secretive tax haven of the British Virgin Islands but based
in Beijing. Trendfield had helped China’s state-owned nuclear company,
Sino-U, secure its uranium permits in Niger in 2006 and ended up with a 5
percent stake in the project for itself.20 Guy Duport, a Frenchman with an
MBA from the University of Liverpool who was Trendfield’s chief executive, wrote on his LinkedIn page, “My negotiation skills were instrumental in the organisation and framework of the establishment of the strategic
partnership between China National Nuclear Corporation [Sino-U] and
the Republic of Niger for uranium exploration and exploitation.”21
In 2009, as the uranium project took shape, Trendfield pledged to rehabilitate the lion enclosure at Niamey’s zoo, a microcosm of the infrastructure that Beijing along with companies linked to it were lavishing on Africa’s resource states. “Taking on this project was an essential part of
our community development programme and it is something we take seriously,” Duport said in a press release.22 “This could also be the platform
that creates more direct community activity by foreign companies to assist
in the development of not only the Niamey National Museum and Zoo, but
the community at large.” Trendfield also arranged for a veterinarian from a
zoo in Missouri to fly in and give the lions their first checkup in a decade.
(He did the full rounds, Trendfield reported, attending to “22 mammals,
28 birds, 4 reptiles,” as well as the lions.)
An insider from the Tandja regime, who said he could not be named
because of the sensitivity of the work he had done, told me that, as well
as befriending the creatures of Niamey zoo, Trendfield had been close to
Tandja and his family, in particular the president’s son, Ousmane, who was
Niger’s commercial attaché in China.
I tracked down Trendfield’s local office on a quiet Niamey side street.
“We don’t usually talk to journalists,” remarked a British geologist who
worked there. But El-Moctar Ichah agreed to speak to me. A Tuareg who
had spent twenty years at Areva exploring for uranium in northern Niger
as well as dabbling in politics, Ichah was the head of Trendfield’s subsidiary in Niger.23 He told me Trendfield had helped Sino-U with the standard
things that consultancies do: arranging visas and site visits and requesting
permits. “We helped to introduce China here, because Niger was not well
known.”24 I asked him to clarify Trendfield relationship with Taneja’s
son. “That is just speculation. He was in China. That does not mean we
had ‘relations.’” Ichah went on, “That question does not concern us, so we
are not going to respond.” Later he added, “We do our work to the highest
ethical standards.” I sent Guy Duport questions about Trendfield’s business in Niger. He did not reply.
In the weeks before the soldiers made their move, the crisis sparked by
Tandja’s attempts to prolong his rule had become feverish. Ethnic rivalries were bubbling. In the barracks of the Nigerien army some had seen
enough. There are differing accounts of the maneuvering within the military immediately before the coup. According to some versions two separate groups of officers—one composed of senior commanders, the other a younger cohort—simultaneously decided that this was the day to depose the president. The streets emptied as the sound of shooting rang
out. By late afternoon national radio was broadcasting nothing but military music—a classic signal of a successful coup. The president who had
thrown in his lot with Beijing was spirited away and incarcerated. Seated
in front of army brass in camouflage fatigues, a spokesman for the newly installed junta said it had suspended the constitution and the institutions of
state. Salou Djibo, a colonel hitherto unknown to the public, was declared
Niger’s new ruler.
For all the anxiety in Niamey, there was also relief, particularly among
the Western diplomats who had criticized Tandja’s authoritarianism and
feared the constitutional crisis could plunge Niger into chaos in which the
Islamist affiliates of al-Qaeda that roam the Sahara could flourish. Others
had commercial reasons to welcome the coup.
Olivier Muller appeared thoroughly at ease with the turn of events—and
well he might. He was Areva’s boss in Niger. Geological maps of Niger’s
uranium deposits lined the walls of his office. When I went to see him he
had just come from a meeting with Djibo, the leader of the junta. “I met the
president for one hour this morning,” the jocular Frenchman told me.25
“He’s very happy we are here, and he wants us to do more. Nice guy. If you
have one hour with the president, it’s going well. If not, you get five minutes,” Muller went on. “Obviously,” he made sure to add, “we don’t talk
politics, just business.” With Tandja, by contrast, negotiations had been
“tough.” Now the thorn had been removed from Areva’s side. “Are France
and Areva going to reinforce their presence here?” Muller said. “Yes, I
think so.”
Like the Chinese ambassador, however, Muller was wary of depicting
an all-out battle for resources between the new powers and the old. Quite
the opposite: Muller described a future in which the need to guarantee
the smooth running of the resource trade outweighed national goals, even
when state-owned companies from East and West vied for African governments’ favor. “Honestly, there is not competition,” Muller said. “In the next
ten years there are going to be smaller discoveries. People will be forced to
cooperate. All these so-called competitors will share infrastructure.”
He was right—and not just about uranium in Niger. South of the border
in Nigeria Total of France has formed a partnership with a Chinese oil company to extract crude from beneath the seabed. French and Chinese
colleagues from the joint venture can be seen drinking together in the bars
of uptown Lagos—hardly a scene of economic warfare over natural resources. In Guinea the Anglo-Australian mining house Rio Tinto is developing the vast iron ore deposit at Simandou with the backing of Chinalco,
the Chinese state-owned miner that is also Rio’s biggest shareholder.
China spends two-thirds of its worldwide outlay on foreign corporate
acquisitions in the resources sector.26 Between 2009 and 2012 Chinese
state-owned groups spent $23 billion buying Western companies with African resource assets that stretched from Sierra Leone to South Africa.27
Alongside “Angola Mode,” the barter deals swapping infrastructure and
cheap credit for natural resources under opaque terms, this is China’s second path to African resources: buying its way into established Western
companies of the sort that have long profited from the continent’s oil and
minerals. It is an approach that Sam Pa’s Queensway Group has mimicked.
I met Nik Zuks in the bar of a Conakry hotel days before the first round
of Guinea’s presidential elections in June 2010. Graying and grizzled, the
Australian mining entrepreneur had the bearing of a frontiersman. Zuks
had spent years first in Angola, then in Guinea, and he knew the turf. His
company, Bellzone, was listed on Aim, the junior London stock market
used by a procession of small mining companies of varying quality to raise
capital from investors prepared to take risks for the prospect of high returns. Bellzone had secured rights to an iron ore prospect near Guinea’s
coast—not on the scale of Simandou but substantial nonetheless and easier
to export than the remote deposit over which Rio Tinto and Beny Steinmetz were grappling.
Zuks was in good spirits—I saw him and his colleagues drinking champagne on the eve of the polls—and it was easy to see why. The Queensway
Group had struck a deal with Bellzone that would serve as an insurance
policy should the winner of the imminent election tear up China International Fund’s opaque $7 billion mining and infrastructure agreement with
Dadis’s junta.
CIF, the Queensway Group’s infrastructure and mining arm, was, Zuks
believed, breaking open the resources industry, creating a way to bypass the dominance of the traditional multinationals like Rio Tinto and offering new sources of funding outside the big Western banks and multilateral
lenders like the World Bank. “They are nimble footed,” he told me, “and
they make decisions quickly.”28
That nimble footedness allowed the Queensway Group to retain its interests in Guinea’s resources even after the new government scrapped its
$7 billion megadeal. “Since I came to power Sam has not been to Guinea,”
Alpha Condé told me when I interviewed him in Paris after his election
victory. Air Guinée International, the new Guinean flag carrier backed by
China International Fund whose launch I had attended in Conakry, was
wound up before it ever flew. But Pa was still present in Guinea—not in
person but via the London stock market. CIF reclaimed most of the $100
million it had wired to Guinea to prop up the junta—the same amount
China Sonangol, the group’s partnership with Angola’s state oil company,
would spend buying shares in Bellzone.29
A month before the election Bellzone announced an agreement with
China International Fund under which the CIF would combine an iron
ore permit the junta had granted it with Bellzone’s adjacent prospect. The
two companies would develop them jointly, with CIF to provide $2.7 billion of funding.30 Setbacks and delays dogged their work, but in December
2012 they shipped what Bellzone said was the first iron ore exported from
Guinea since 1966.
The tie-up with Bellzone offered the Queensway Group a way to expand its interests deeper into the Western resource industry. Bellzone and
CIF struck a deal under which both had rights to sell their share of the ore
to Glencore, the vast commodities house that had also done business with
Dan Gertler in Congo.
Sam Pa was graduating from Chinese spook-cum-fixer to a player in the
global resources industry, adding some London guanxi to his connections
in Beijing and African capitals. The Queensway Group also sought out
allies in Toronto, another stock exchange favored by mining companies,
lending money to a company called West African Iron Ore, which had an
iron ore permit close to those that Bellzone and CIF were developing in
Guinea. It was an alliance of middlemen: West African Iron Ore was led by
Guy Duport, the man who had brought the Chinese into Niger’s uranium
industry through Trendfield, the benefactor of Niamey’s lions.31 In Angola the Queensway Group amassed minority stakes in oil ventures led by some
of the industry’s foremost Western companies: BP of the UK, Total of
France, Eni of Italy, Statoil of Norway, Conoco Phillips of the United States.
As one of the foremost middlemen in China’s advance into Africa, Sam
Pa has adopted the tactics of Françafrique: fuse the power of those who
hold offices of state with private business interests so as to enrich both
from the exploitation of African natural resources. The Queensway Group
was even said to have tapped the old networks of Françafrique. According to a US congressional report, China Sonangol enlisted Pierre Falcone,
the French arms dealer who supplied weapons worth $790 million to the
MPLA regime in Angola during the civil war in exchange for oil and who
is known, according to a separate US Senate report, as a “close associate” of José Eduardo dos Santos.32 (Falcone, who has set up a consultancy
based in Beijing, denies having had a commercial relationship with China
Sonangol.)
Like Elf before them, Queensway Group companies appear to have funneled money to African officials in countries whose resources they coveted.
The ledger of payments published by a Hong Kong court in the dispute
between the Queensway Group’s founders and Wu Yang, the Chinese oilman who claimed he had not received his dues for making some valuable
introductions, offers a glimpse of how the Queensway Group uses cash
to “curry favor” with African governments. One entry, in a section listing
financial transactions made in 2009, reads simply: “Antonio Inacio Junior:
Loan for project (HK$2,340,000).”33
That indicates that a Queensway Group company made a loan in 2009,
worth about US$300,000, to someone called Antonio Inacio Junior. There
is nothing to suggest anything untoward—unless you know that Antonio
Inacio Junior is the name of Mozambique’s ambassador to China.34 He
appears, close cropped and sharp suited, in photographs of diplomatic
engagements in China. I called the Mozambican embassy in Beijing to
ask the ambassador about the loan and, as requested, sent a fax listing my
questions. No reply came.
Mozambican government records show that a joint venture between
China International Fund and a local company was created in November
2008.35 The company, Cif-Moz, was formed to pursue opportunities in
agriculture, industry, minerals, the production of construction materials, and other sectors. It established a foothold for Sam Pa and his allies in a
country that was undergoing one of the great commodity rushes of recent
years, as the giants of the resource business jostled for untapped stocks of
coal and natural gas. In November 2009—the same year as the loan to the
ambassador—Cif-Moz was awarded a permit to prospect for a limestone
mine south of the capital, Maputo.36 Plans for a $35 million cement factory
nearby followed.37 When I asked a lawyer for a Queensway Group company why a loan had been granted to a serving official in a country where
the group was seeking to do business, he declined to answer.38
Mozambique was just one target in the Queensway Group’s quickfire expansion across Africa from its Angolan base. Mahmoud Thiam,
the Guinean mining minister who brokered the deal through which the
Queensway Group bailed out the country’s murderous junta, added to his
position as minister a role as an ambassador for the group’s interests. Following a coup in Madagascar, Thiam took part in negotiations between
emissaries from the Queensway Group and the putschists’ energy minister. “It was all the same things they were doing in Guinea—trying to find
projects that were interesting and doing good-faith advances,” Thiam told
me.39 China Sonangol tried to wrest an oil prospect from a rival but eventually lost out.40
At the same time Thiam served as an envoy for the Queensway Group
to the leaders of Niger’s coup. He told me that the group made a “good
faith” payment to Niger’s junta of $40 million and expressed an interest
in Agadem, the oil block that CNPC, the Chinese state-owned oil group,
was drilling for the country’s first crude—an indication of the Queensway
Group’s readiness to challenge China’s national interests when doing so
offered a chance for profit. “But the president of the transitional government wisely decided not to touch that money until there was a full agreement,” Thiam told me.41 “It was never reached, so the payment was returned.” (Thiam insists that he ceased to work with China Sonangol and
the Queensway Group once he stopped being a minister.)
The Queensway Group’s forays into Madagascar and Niger came to
nothing, but they illuminate a key element of its approach: Sam Pa offers
pariah governments a ready-made technique for turning their countries’
natural resources into cash when few others are prepared to do business
with them. Governments installed by military coups are “starving for funding,” Thiam told me. “These guys come and they say, ‘We will fund
you when no one else will.’ If you have the interest of your people and your
own survival at stake, you will take that money.”
There is a distinct whiff of hypocrisy to Western criticism of China’s advance into Africa. Beijing was vilified when it sought to protect its access
to Sudanese oil by preventing George W. Bush from tightening sanctions
against Omar al-Bashir, the dictator who has presided over campaigns of
state-sponsored terrorism against his opponents. But China was merely
adopting the same sort of resource realpolitik that Washington demonstrated when Condoleezza Rice, Bush’s secretary of state, extended a
warm welcome to Teodoro Obiang Nguema, the kleptocrat from Equatorial Guinea who consigns his enemies to the hideous recesses of Black
Beach prison but has laid out the red carpet for American oil companies.
The opacity of China’s infrastructure-for-resources deals has been justifiably castigated, but when US lawmakers introduced pioneering new
transparency rules to force oil and mining companies to disclose their
payments to foreign governments, the American Petroleum Institute, the
US oil industry body, went to court to try to block them. Although there
was legitimate uproar when a Chinese ship that docked in South Africa
was found to contain weapons bound for Robert Mugabe’s regime in Zimbabwe, any notion that China is the sole or even the main source of the
oceans of weapons that slosh through Africa is misplaced. One study by
two Norway-based academics, based on years of arms import statistics and
governance indicators, found that the United States had a greater propensity than China to sell weapons to repressive African governments.42 The
Chinese exported fewer weapons to Africa between 1992 and 2006 than
Ukraine did, the study found.
It is too simplistic to see China’s quest for African resources as a
Manichean struggle for nature’s treasure between East and West. There
is competition, but there is also cooperation in the business of resource
extraction. And for all its increased attractiveness to rival investors from
overseas, much of Africa remains locked at the foot of the global economy.
Ibrahim Iddi Ango, the industrialist who headed Niger’s chamber of
commerce, told me that Niger’s rulers had sold the country short in their negotiations with the Chinese. “They need strategic resources. You must
say, ‘You are interested in that? These are the conditions. First, you must
use local labor. Second, all the needs you have—for example, the transit—
you must use at a minimum 50 percent local operators.’ But when they
came the government said none of this. The state took a percentage of the
businesses and let the Chinese do what they want.” A brief window of opportunity to use China’s desire for African minerals to insist on securing
for Niger the skills and infrastructure that might help to salve the resource
curse by broadening the economy was closing. “To diversify, it’s central,”
Iddi Ango said—and with good reason. Niger is among the African states
most acutely dependent on a handful of raw commodity exports, their economic fortunes yoked to the whims of far-off consumers. On the African
Development Bank’s index, where a higher score indicates a more diversified economy, relatively wealthy countries not shackled to the resource
trade such as Mauritius and Morocco score 22 and 41, respectively. The
average for the whole of Africa, including more prosperous North Africa,
is 4.8. The most oil-dependent states, Angola and Chad, record the lowest
scores, 1.1. Niger does only marginally better, with a score of 2.4.43
“But if you let China do what it wants—as many African countries
have—they pay for the oil or the resources and use Chinese labor, Chinese
trucks. It’s a big problem,” Iddi Ango said. “They are coming because the
resources are here. This moment will not be repeated. We can’t miss it.
When the uranium or the oil is finished, they will leave.”
The fall of Tandja demonstrated the limits of China’s readiness to get
involved in domestic politics to protect African allies. But Xia Huang, the
Chinese ambassador in Niamey, encapsulated how China’s readiness to
spend and build allowed Beijing to gain a foothold sufficiently strong that
its interests could withstand a coup against an ally. “Today there is a bridge
between the two sides of the River Niger,” he told me. “But there is also a
bridge that links China and Niger.”
Yet the true value of China’s offer to guide Africa on a path to economic
diversification and industrialization—the road that led the rich world to
prosperity—rests on whether its construction spree is geared primarily
toward cultivating the rulers who govern access to resources or toward
broadening the opportunities of the population at large. Neither railways
that simply connect Chinese-owned mines to Chinese-built ports for the export of commodities nor vanity projects of great cost but little economic
usefulness will lift resource states’ inhabitants from their poverty. Martyn
Davies, the chief executive of a South African consultancy called Frontier
Advisory who has worked as an adviser on Chinese deals in Africa, told
me, “When you have a commodity-driven economy, where a lot of people
are excluded, it’s a silo economy. It’s very difficult to build infrastructure
that supports inclusive growth. Is Chinese-financed infrastructure going to
provide diversification? Which comes first?” He added, “African governments should never assume that responsibility for the development of our
continent has been outsourced to Beijing.”
Beijing appears to be undercutting its side of the deal. Chinese goods
like the counterfeit textiles flooding into northern Nigeria drown out hopes
for industrialization, regardless of how many roads and railways Chinese
companies lay. Lamido Sanusi, governor of Nigeria’s central bank from
2009 to 2014, put it well: “So China takes our primary goods and sells us
manufactured ones. This was also the essence of colonialism. The British
went to Africa and India to secure raw materials and markets. Africa is now
willingly opening itself up to a new form of imperialism.”44
By the time Tandja was deposed, the bridge over the River Niger was built,
China’s oil project was in progress, its refinery was completed, its uranium
mine was taking shape, and the lion enclosure in Niamey zoo was marked
out. Xia Huang, the ambassador, told me that the junta’s leader had assured him that China’s position was not under threat. Both China and
France pressed on with their plans for Niger’s commodities. Areva pushed
ahead with a new $2.6 billion mine that would double the company’s output of Nigerien uranium. The Chinese found more oil than they had first
thought, setting Niger on a course to join the middle ranks of African oil
producers.
The soldiers who ousted Tandja were good to their word. They arranged elections, which international observers deemed legitimate, and
went back to their barracks in April 2011, fourteen months after the coup.
The elected president, Mahamadou Issoufou, was, like Alpha Condé in
Guinea, a seasoned opposition leader who launched an anti-corruption
campaign upon taking office. While jihadists ran riot across the border in Mali, Issoufou won a reputation as a bulwark of stability in a tumultuous
region.
When I met Issoufou during a trip to London a year into his presidency,
he was eloquent and impressive, his chunky figure animated with the force
of his grand plans to transform Niger.
Issoufou was determined to balance the competing interests of the great
powers that sought Niger’s resources rather than allow them to consume
him as Tandja had done. He would not bow down before China, he told
me. “Their business has been aggressive in Africa—in natural resources,
in uranium, in oil. We are an open country—open to investors from anywhere. But we want win-win partnerships, and that is our relationship with
China. We will defend our interests, and they will defend theirs.”45
Issoufou took the fight to the French too. He embarked on eighteen
months of negotiations with Areva over the share of uranium revenues it
pays to the state. The talks were fractious. Areva closed its mines for a
month, ostensibly for maintenance but also sending a signal of its power to
choke off the government’s income.46 In May 2014 the two sides reached
a deal. Areva agreed to pay higher royalties and to build a road linking the
capital to the northern uranium region, but it retained some tax breaks
under an unpublished contract.47
Even in what appeared to be triumph, however, Niger and its president were reminded of the extent to which the fortunes of a resource state
are dictated by the twists of a global economy whose raw ingredients it
supplies. Following the Fukushima disaster in Japan in 2011 governments
around the world turned away from nuclear power, sending the price of
uranium tumbling. On the day it announced its new deal in Niger Areva
also revealed that it was shelving the development of a huge new uranium
mine because the depressed price rendered the project uneconomic.
Nonetheless, Niger had joined a small but growing group of resource
states in west Africa that were edging from decades of havoc toward more
representative rule and a modicum of stability, among them Guinea, Sierra Leone, and Liberia. But the lesson of their most stable near-neighbor,
Ghana, is that the resource curse can still bite where there is peace—
abetted by the global institutions charged with alleviating Africa’s poverty
and a financial system that drains away the proceeds of the continent’s
natural wealth.
next 178s
Finance and Cyanide
notes
chapter 5: when elephants fight,
the grass gets trampled
1. The details of Frederic Cilins’s conversation with Mamadie Touré come
from the transcript of the FBI’s recording of their meeting, as incorporated in
the “Report and Recommendation of the CTRTCM [Guinea’s Comité Technique de Revue des Titres et Conventions Miniers] on the Licenses and Mining Convention Obtained by VBG,” April 2014, www.contratsminiersguinee
.org/blog/publication-report-recommendation-VBG.html (in French, author’s
translation).
2. For copies of the “contracts” in question, see the documents published
by the Guinean government inquiry together with its report into BSGR’s activities. “Report and Recommendation of the CTRTCM . . .” (in French, author’s translation), www.documentcloud.org/documents/1105518-declaration-de
-mamadie-toure-et-pieces-jointes.html.
3. See “About Beny Steinmetz,” Beny Steinmetzwebsite, http://beny-steinmetz
.com/about.html, and William MacNamara, “Dealmaker with Eye for Wilder
Frontiers,” Financial Times, February 19, 2012, www.ft.com/intl/cms/s/0/c2
df0cca-562a-11e1-a328-00144feabdc0.html.
4. Rebecca Bream, “Nikanor and Katanga to Merge,” Financial Times, November 7, 2007, www.ft.com/intl/cms/s/0/5e9f1a68-8ca1-11dc-b887-0000779fd2
ac.html; Eric Onstad, Laura Macinnis and Quentin Webb, “The Biggest Company You Never Heard Of,” Reuters, February 25, 2011, www.reuters.com/
article/2011/02/25/us-glencore-idUSTRE71O1DC20110225.
5.Martin Meredith, The State of Africa (London: Simon and Schuster,
2006), 67.
6. World Bank data for 2012, World Development Indicators, http://data
.worldbank.org/indicator/SH.DYN.MORT.
7. Rio Tinto gives a history of the Simandou project at “Simandou,” Rio Tinto,
www.riotintosimandou.com/ENG/project_overview/33_history.asp.
8. Powerscourt,“Response to Press Speculation,” statement on behalf of
BSGR, May 9, 2013, www.prnewswire.com/news-releases/bsgr-response-to
-press-speculation-206749511.html.
9. Cilins gave an account of his activities to Steven Fox, an investigator with a
9781610394390-text.indd 272 1/13/15 12:15 PM
notes to chapter 5 273
firm called Veracity, which was hired as part of the investigation into BSGR that
the Guinean government of Alpha Condé launched.
10. Mamadie Touré, Sworn Statement, Florida, December 12, 2013. This statement was published together with the report of the Guinean inquiry. “Report and
Recommendation of the CTRTCM . . .”
11. Ibid.
12. Ibid.
13. Tom Burgis, Helen Thomas, and Misha Glenny, “Guinea Reignites
$2.5bn Mining Tussle,” Financial Times, November 2, 2012, www.ft.com/cms/
s/0/06d895f4-24f7-11e2-8924-00144feabdc0.html#axzz3HUSpQnyc.
14. “Corruption Perceptions Index 2006,” Transparency International, www.
transparency.org/research/cpi/cpi_2006.
15. Touré, Sworn Statement.
16. Asher Avidan profile, www.bsgresources.com/about/senior-management,
accessed May 2, 2014, subsequently removed from BSGR’s website.
17. Touré, Sworn Statement.
18. Burgis, Thomas, and Glenny, “Guinea Reignites $2.5bn Mining Tussle.”
19.Angolan Embassy in London, “Ministry of Finance Denies Misuse of Chinese Loans,” October 17, 2007.
20. Jon Lee Anderson, “Downfall,” New Yorker, April 12, 2010, www.new
yorker.com/magazine/2010/04/12/downfall-3.
21. Mahmoud Thiam, e-mail exchange with author, April 2013.
22. Campaign contributions compiled by the Center for Responsive Politics,
http://www.opensecrets.org/pres08/search.php?cid=ALL&name=&employ=
UBS&cycle=2008&state=&zip=&amt=a&sort=n&page=14.
23. Tom Burgis, “Rusal Seeks Help over Mining Dispute,” Financial Times,
September 22, 2009, www.ft.com/cms/s/0/b0ddbe9a-a6d2-11de-bd14-00144feab
dc0.html#axzz3HUSpQnyc.
24. Tom Burgis, Tom Mitchell, and Catherine Belton, “Guinea Demands
Share of UC Rusal Offering,” Financial Times, January 25, 2010, www.ft.com/
intl/cms/s/0/d2bb3c8a-0a1a-11df-8b23-00144feabdc0.html.
25. “UC RUSAL Starts the Realization of Dian-Dian Project of State Importance in Guinea,” Rusal press release, July 10, 2014.
26. Henry Bellingham, letter to Bakary Fofana, Guinean minister of state for
foreign affairs, copied to Mahmoud Thiam and others, September 28, 2010 (copy
in author’s possession).
27. Mahmoud Thiam, telephone interview with author, September 2009.
28. See Rio Tinto’s lawsuit of April 30, 2014, against Vale, Beny Steinmetz,
9781610394390-text.indd 273 1/13/15 12:15 PM
274 notes to chapter 5
BSGR, Mahmoud Thiam, and others, www.riotinto.com/media/media-releases
-237_10305.aspx.
29. Mahmoud Thiam, e-mail exchange with author, April 30, 2014. See also
James Wilson, Tom Burgis, and Joe Leahy, “Rio Tinto Sues Vale and BSGR over
Guinea Mine Controversy,” Financial Times, April 30, 2014, www.ft.com/intl/
cms/s/0/8ef9c710-d06c-11e3-af2b-00144feabdc0.html#axzz3Ezf9d5kT.
30. Mahmoud Thiam, telephone interview with author, December 2013. The
account of Thiam’s initial dealings with the Queensway Group is drawn from
this interview.
31. Manuel Vicente, interview with author, Luanda, June 2012; confirmed by
Mahmoud Thiam, interview, December 2013.
32. Details of the events of September 28, 2009 are most comprehensively
recounted in “Bloody Monday: The September 28 Massacre and Rapes by
Security Forces in Guinea,” Human Rights Watch, December 2009, www.hrw
.org/sites/default/files/reports/guinea1209webwcover_0.pdf, and in UN Security Council,“Report of the International Commission of Inquiry Mandated
to Establish the Facts and Circumstances of the Events of 28 September 2009
in Guinea,” December 18, 2009, www.securitycouncilreport.org/atf/cf/%7B65
BFCF9B-6D27-4E9C-8CD3-CF6E4FF96FF9%7D/Guinea%20S%202009%20
693.pdf.
33. Rukmini Callimachi, “Civil War Feared in Guinea as Militia Grows,” Associated Press, December 6, 2009, www.sify.com/news/civil-war-feared-in-guinea-as
-militia-grows-news-international-jmgbujcggadsi.html. The presence of Israeli
and South African instructors at the training camps in Forecariah is also reported
elsewhere, such as US Embassy in Rabat,“Guinea: Update on Dadis Camara’s
Health,” diplomatic cable, December 17, 2009, WikiLeaks, December 4, 2010,
https://wikileaks.org/cable/2009/12/09RABAT988.html.
34. Israel Ziv, LinkedIn profile, http://il.linkedin.com/in/zivisrael, accessed
May 2, 2014.
35. Global CST website, accessed May 2, 2014; US Embassy in Bogota,“Colombian Defense Ministry Sours on Israeli Defense Firm,” diplomatic cable, December 1, 2009, WikiLeaks, April 6, 2011, http://wikileaks.org/cable/2009/12/09
BOGOTA3483.html.
36. Multiple interviews with people who have investigated Global CST and
Dadis’s ethnic militia as well as associates of Kenan yielded an incomplete picture
of the work the company did in Guinea. The Comité Technique de Revue des
Titres et Conventions Miniers, in a letter to BSGR of October 30, 2012, referred
to “the illegal sale of military material by the company Global CST to the army
9781610394390-text.indd 274 1/13/15 12:15 PM
notes to chapter 5 275
of the Republic of Guinea for a value of USD 10 million” (in French, author’s
translation). “Promising Contracts,” Africa Confidential, May 28, 2010, www.
africa-confidential.com/article-preview/id/3544/Promising_contracts, describes
Israel Ziv’s arrival in Guinea to train an ethnic militia. The Israeli authorities
announced in 2010 that they had fined Global CST over its Guinean contract.
See “Israel Fines Security Firm for Negotiating Deal to Supply Arms to Military
Junta in Guinea,” Fox News, May 18, 2010, www.foxnews.com/world/2010/05/18/
israel-fines-security-firm-negotiating-deal-supply-arms-military-junta-guinea.
37. Mahmoud Thiam, e-mail exchange with author, April 2013.
38. Callimachi, “Civil War Feared in Guinea as Militia Grows.”
39. Human Rights Watch, “Bloody Monday.”
40. Mahmoud Thiam, e-mail exchange with author, April 2013.
41. US Embassy in Paris,“Guinea: Das Fitzgerald’s Consultations in Paris,”
diplomatic cable, November 19, 2009, Wikileaks, September 1, 2011, www.wiki
leaks.org/plusd/cables/09PARIS1532_a.html.
42. Mahmoud Thiam, telephone interview with author, December 2013.
43. “Accord Cadre entre Fonds International De Chine Sa et le Gouvernement
de la République de Guinée,” June 12, 2009, in author’s possession; “République
de Guinée et CIF Singapore Pte Ltd et China Sonangol International (S) Pte.
Ltd, Pacte d’actionnaires,” October 10, 2009, in author’s possession; accompanying loan agreement between CIF Singapore and the Republic of Guinea, in
author’s possession.
44. Rusal, “RUSAL Won a Three-Member ICC Arbitral Tribunal Case
Against the Republic of Guinea,” July 21, 2014, www.rusal.ru/en/press-center/
news_details.aspx?id=10762&ibt=13&at=0.
45. UN Security Council, “Report of the International Commission of Inquiry . . .”
46. The UN inquiry would name both Dadis and Toumba as well as the antiÂ
trafficking chief Moussa Tiégboro Camara as the commanders for whom there
were “reasonable grounds to suspect individual criminal responsibility” for the
atrocities of September 28. UN Security Council, “Report of the International
Commission of Inquiry Mandated to Establish the Facts and Circumstances of
the Events of 28 September 2009 in Guinea.” In an interview with RFI Toumba
claimed that Dadis was trying to place all the blame for the massacre on him. “Camara Betrayed Me, Says Diakité,” RFI English, December 16, 2009, www1.rfi.fr/
actuen/articles/120/article_6202.asp.
47. Promotional material handed out at the launch of the Air Guinée International named Hadja Halimatou Diallo as deputy chief executive (in author’s
9781610394390-text.indd 275 1/13/15 12:15 PM
276 notes to chapter 5
possession). She was the wife of Cellou Dalein Diallo, the candidate of the Union
des Forces Démocratiques de Guinée, widely regarded as the frontrunner ahead
of the elections. He ultimately lost in a run-off to Alpha Condé.
48. China South Locomotive and Rolling Stock Corporation,“5 CSR locomotives & 22 Carriages Exported to Guinea,” press release, May 6, 2010,
www.csrgc.com.cn/g981/s2889/t59603.aspx, describes a ceremony marking
the embarkation of rolling stock for Guinea in the presence of officials from
the company and from China International Fund and Guinea’s ambassador
to China.
49. Mahmoud Thiam, interview with author, Conakry, June 2010.
50. “Guinea Soldiers Arrested for Attack on President’s Home,” BBC News,
July 20, 2011, www.bbc.com/news/world-africa-14197052; “Presidential Guard
Fall Out,” Africa Confidential, July 22, 2011, www.africa-confidential.com/
article-preview/id/4109/Presidential_guard_fall_out.
1. The Palladino affair, involving a questionable loan deal with the state
mining company, was a case in point. See “A New Battle to Control the Mines,”
Africa Confidential, July 22, 2011, www.africa-confidential.com/article-preview/
id/4508/A_new_battle_to_control_the_mines.
52. Patrick Radden Keefe, “Buried Secrets,”New Yorker, July 8, 2013, www.
newyorker.com/magazine/2013/07/08/buried-secrets.
53. See, for example, Powerscourt, “Response to Press Speculation.”
54. When Mark Malloch-Brown and FTI settled the claim for €90,000, a
statement issued by BSGR’s new PR firm, Powerscourt, said Malloch-Brown and
FTI had “conceded defeat and agreed to pay substantial compensation and legal costs.” FTI countered, “Neither FTI Consulting nor Lord Malloch-Brown
has ‘conceded defeat’ in any way.” See, for example, James Wilson, and Cynthia
O’Murchu, “Steinmetz and Malloch-Brown Settle Guinea Damages Claim,” Financial Times, June 10, 2013, www.ft.com/intl/cms/s/0/6f62f158-d1ce-11e2-b17e
-00144feab7de.html#axzz3Ezf9d5kT. FTI said the €90,000 settlement was less
than what it and Malloch-Brown would have spent on legal fees trying to have
the claim struck out. Beny Steinmetz and three BSGR directors also sued Global
Witness, seeking to force the group to disclose information it held on the company under the Data Protection Act. See, for example, Henry Mance, “Beny
Steinmetz Tests UK Data Laws in Global Witness Dispute,”Financial Times,
March 10, 2014, www.ft.com/cms/s/0/fc1d57a2-a606-11e3-b9ed-00144feab7de
.html#axzz3EzpqJvFU.
55. BSG Resources,“Opportunities Available for People of Guinea Being
Destroyed by Discredited Regime,” March 22, 2013, www.bsgresources.com/
9781610394390-text.indd 276 1/13/15 12:15 PM
notes to chapter 5 277
media/opportunities-available-for-people-of-guinea-being-destroyed-by
-discredited-regime.
56. Mahmoud Thiam, telephone interview with author, October 2012.
57. Powerscourt, “Response to Press Speculation,” and BSG Resources,
“Opportunities Available for People of Guinea Being Destroyed by Discredited
Regime.”
58. Alpha Condé, interview with author, Paris, November 2013.
59. Keefe, “Buried Secrets.”
60. Tom Burgis, “US Court Allows Forensic Tests in Guinea Case,” Financial
Times, January 16, 2014, www.ft.com/cms/s/0/9b29f9f0-7ece-11e3-8642-00144
feabdc0.html?siteedition=uk#axzz3HUSpQnyc; Tom Burgis, “French Businessman Pleads Guilty in Guinea Mining Case,”Financial Times, March 10, 2014,
www.ft.com/intl/cms/s/0/a138edec-a87c-11e3-b50f-00144feab7de.html.
61. Tom Burgis, “French Businessman Jailed for 2 Years in Guinea Mining
Case,” Financial Times, July 25, 2014, www.ft.com/intl/cms/s/0/64fb3f4e-1427
-11e4-9acb-00144feabdc0.html#axzz3EzpqJvFU.
62. Responses to questions from the Financial Times by Powerscourt on behalf of Beny Steinmetz and BSGR, March 10, 2014, in author’s possession.
63. The claim against Global Witness filed by Beny Steinmetz and three directors of BSGR filed at the High Court in London on December 12, 2013, described Steinmetz as the “principal financial beneficiary of BSGR,” in author’s
possession.
64. Touré, Sworn Statement.
65. Press statement issued by Powerscourt on behalf of BSGR, March 7, 2014, in
author’s possession. When I was reporting these developments for the Financial
Times I sent representatives of BSGR and Steinmetz a list of questions about the
version of events offered by Mamadie Touré (see Touré, Sworn Statement) and the
final report of the Guinean inquiry. The representatives declined to answer them.
66. “Report and Recommendation of the CTRTCM . . .”
67. Ibid.
68. Vale, “Vale Informs on Simandou Developments,” press release, April 25,
2014, http://saladeimprensa.vale.com/en/releases/interna.asp?id=22674.
69. See James Wilson, Tom Burgis, and Joe Leahy, “Rio Tinto Sues Vale and
BSGR Over Guinea Mine Controversy,” Financial Times, April 30, 2014, www.
ft.com/intl/cms/s/0/8ef9c710-d06c-11e3-af2b-00144feabdc0.html#axzz3EzpqJ
vFU,and Tom Burgis, “Rio Tinto and Vale Step Up Battle over Guinean Deposit,” Financial Times, May 1, 2014, www.ft.com/intl/cms/s/0/e1ec7172-d141
-11e3-81e0-00144feabdc0.html.
9781610394390-text.indd 277 1/13/15 12:15 PM
278 notes to chapter 5
70. Rio Tinto, “Rio Tinto and Government of Guinea Sign New Agreement
for Simandou Iron Ore Project,” statement, April 22, 2011, www.riotinto.com/
media/media-releases-237_6340.aspx.
71. Rio Tinto, “Rio Tinto and Chinalco Sign Memorandum of Understanding
to Form Iron Ore Joint Venture for the Simandou Project in Guinea,” statement,
March 19, 2010, www.riotinto.com/media/media-releases-237_1455.aspx.
72. “Recommandation Concernant les Titres Miniers et la Convention Minière
Détenus par la Société,” Comité Technique de Revue des Titres et Conventions
Miniers on the Vale-BSGR rights (held in a joint venture called VBG), April 9,
2014.
73. “Guinea: Letter of Intent, Memorandum of Economic and Financial
Policies and Technical Memorandum of Understanding,” International Monetary Fund, February 11, 2012, www.imf.org/External/NP/LOI/2014/GIN/091814
.pdf.
74. Harry Snoek, telephone interview with author, October 2012.
chapter 6: a bridge to beijing
1. “France Condemns Niger President’s Emergency Powers,” RFI, July 2,
2009, www1.rfi.fr/actuen/articles/115/article_4174.asp.
2. Ali Idrissa (head of Rotab, a Nigerien transparency campaign), interview
with author, Niamey, April 2010. See also Tom Burgis, “Strategic Resources: A
Richer Seam,” Financial Times, May 20, 2010, www.ft.com/cms/s/0/d9853fda
-6441-11df-8618-00144feab49a.html.
3. Mohamed Bazoum, interview with author, Niamey, April 2010.
4. “Vast Embezzlement Under Previous Niger Regime: Report,” Agence
France-Press, March 27, 2011, http://en.starafrica.com/news/vast-embezzlement
-under-previous-niger-regime-report-157192.html; “L’ex-président nigérien MamaÂ
dou Tandja est sorti de prison,” Jeune Afrique, May 11, 2011; “Fire Consumes
Niger’s Anti-Corruption Files,” Reuters, January 3, 2012, http://ca.reuters.com/
article/topNews/idCATRE8021A720120103.
5. Abdoulaye Massalatchi, “Niger Capital Calm, Business as Usual Day After Coup,” Reuters, February 19, 2010, www.reuters.com/article/2010/02/19/
idUSLDE61I0CG._CH_.2400.
6. Edward George, The Cuban Intervention in Angola, 1965–1991: From Che
Guevara to Cuito Cuanavale (New York: Frank Cass, 2005), 190.
7. Xia Huang, interview with author, Niamey, April 2010.
9781610394390-text.indd 278 1/13/15 12:15 PM
notes to chapter 6 279
8. Ibrahim Iddi Ango, interview with author, Niamey, April 2010.
9. Vivien Foster, “Africa Infrastructure Country Diagnostic,” World Bank,
September 2008, http://siteresources.worldbank.org/INTAFRICA/Resources/
AICD_exec_summ_9-30-08a.pdf.
10. Tito Yepes, Justin Pierce, and Vivien Foster, “Making Sense of Africa’s
Infrastructure Endowment: A Benchmarking Approach,” World Bank, January
2008, http://elibrary.worldbank.org/doi/book/10.1596/1813-9450-4912.
11. Foster, “Africa Infrastructure Country Diagnostic.”
12. Vivien Foster and Cecilia Briceño-Garmendia, “Africa’s Infrastructure: A
Time for Transformation,” World Bank, 2010, http://siteresources.worldbank.
org/INTAFRICA/Resources/aicd_overview_english_no-embargo.pdf.
13. Simon Freemantle and Jeremy Stevens, “BRIC and Africa: New Partnerships Poised to Grow Africa’s Commercial Infrastructure,” Standard Bank, October 15, 2010; “China-Africa Economic and Trade Cooperation,” Information
Office of the State Council, Beijing, August 2013, www.safpi.org/sites/default/
files/publications/China-AfricaEconomicandTradeCooperation.pdf.
14. Vivien Foster, William Butterfield, Chuan Chen, and Nataliya Pushak,
“Building Bridges: China’s Growing Role as Infrastructure Financier for SubSaharan Africa,” World Bank, 2009, http://siteresources.worldbank.org/INTAF
RICA/Resources/BB_Final_Exec_summary_English_July08_Wo-Embg.pdf.
15. Toh Han Shih, “China to Provide Africa with US$1tr Financing,” South
China Morning Post, November 18, 2013, www.scmp.com/business/banking
-finance/article/1358902/china-provide-africa-us1tr-financing.
16. Martin Meredith, The State of Africa (London: Simon and Schuster, 2005),
227–228.
17. Eva Joly, “Est-ce dans ce monde-làque nous voulons vivre?” Arènes, 2003,
quoted in Nicholas Shaxson, Poisoned Wells: The Dirty Politics of African Oil
(New York: Palgrave Macmillan, 2007). I have also drawn on Shaxson’s account
for other details of the Elf affair.
18. Meredith, State of Africa, 615.
19. Daniel Flynn and Geert de Clercq, “Special Report: Areva and Niger’s
Uranium Fight,” Reuters, February 5, 2014, www.reuters.com/article/2014/02/05/
us-niger-areva-special report-id USBREA140AA20140205.
20. Trendfield website, “Société des Mines d’Azelik SA (SOMINA): Teguidda” accessed May 16, 2014, http://trendfieldonline.com/niger.html.
21. Guy Duport, LinkedIn page, accessed March 7, 2014, https://cn.linkedin
.com/in/guyduport; management profiles, Trendfield website, accessed March 7,
2014.
9781610394390-text.indd 279 1/13/15 12:15 PM
22. Marketwired, “Trendfield Lion Habitat,” press release on behalf of Trendfield, Hong Kong, April 15, 2010, www.marketwired.com/press-release/trend
field-lion-habitat-1168639.htm.
23. Trendfield website, management profiles.
24. El-Moctar Ichah, interview with author, Niamey, April 2010.
25. Olivier Muller, interview with author, Niamey, April 2010.
26. Between 2007 and 2011 68 percent of Chinese mergers and acquisitions
abroad, measured by the value of the transactions, involved energy and resources. The second biggest sector, accounting for 11 percent of activity, was financial services, followed by industrial and chemical companies, with 10 percent.
See “China Outbound M&A,” Squire Sanders, May 2013, www.squiresanders
.com/files/Publication/d54c8c99-e6a0-425e-80d4-4d8b122b7553/Presentation/
Publication Attachment/a18546e6-281d-43d2-adbc-4e01424eed20/Squire_
Sanders_Briefing_May2013.pdf.
27. Ecobank, “Six Top Trends in Sub-Saharan Africa’s (SSA) Extractives Industries,” July 23, 2013, www.ecobank.com/upload/20130813121743289489uJud
Jb9GkE.pdf.
28. Nik Zuks, interview with author, Conakry, June 2010.
29. Mahmoud Thiam interview, December 2013; Bellzone, “CIF Strategic Investment and Proposed Fundraising,” statement to the stock exchange, March 1,
2011.
30. Bellzone, “Binding MOU Reached with Chinese Partner to Develop Rail
and Port Infrastructure for the Kalia Iron Project and to Form a 50/50 Joint Venture to Develop Additional Iron Permits in Guinea, West Africa,” statement to the
stock exchange, May 24, 2010.
31. West African Iron Ore, “West African Iron Ore Signs Binding Letter of
Intent for a $30 Million Finance Facility and Offtake Agreement with Strategic
Partner China International Fund,” statement to the stock exchange, Newswire,
September 4, 2012, www.newswire.ca/en/story/1029729/west-african-iron-ore
-signs-binding-letter-of-intent-for-a-30-million-finance-facility-and-offtake
-agreement-with-strategic-partner-china-internationa.
32. Levkowitz et al., “The 88 Queensway Group”; “Keeping Foreign Corruption Out of the United States: Four Case Histories,”; US Senate Permanent Subcommittee on Investigations, Committee on Homeland Security and
Governmental Affairs, February 2010, www.hsgac.senate.gov/subcommittees/
investigations/hearings/-keeping-foreign-corruption-out-of-the-united-states
-four-case-histories. In Lee Levkowitz, Marta McLellan Ross, and J. R. Warner,
“The 88 Queensway Group: A Case Study in Chinese Investors’ Operations in
Angola and Beyond,” US-China Economic and Security Review Commission,
9781610394390-text.indd 280 1/13/15 12:15 PM
notes to chapter 6 281
July 10, 2009, http://china.usc.edu/App_Images/The_88_Queensway_Group
.pdf, US congressional researchers write that “China Sonangol is the client of
a prominent international consulting firm called Pierson Asia.” Pierson was
founded and is run by Falcone, who has based himself in Beijing since being
released from prison following the Angolagate scandal in France. A person with
close ties to the Futungo told me in April 2014 that Falcone was “one of the architects” of the Queensway Group’s arrival in Angola. Falcone, whom I have repeatedly asked for an interview, told me in an e-mail exchange in April 2014, “For the
sake of clarity, I do not have nor [have] had any working or commercial relationship of any sort with China Sonangol.”
33. Decision of the High Court of the Hong Kong Special Administrative Region, Court of First Instance, HCMP 2143/2011, in Wu Yang v. Dayuan International Development Limited et al., June 4, 2013.
34. “Missões Diplomáticas e Consulares da República de Moçambique,”
Mozambique government, www.embassymozambique.se/down/missoes_diplo
maticas.pdf; “Vice Minister Fu Meets Ambassador of Mozambique to China,”
Chinese Ministry of Commerce, http://english.mofcom.gov.cn/aarticle/photo
news/200808/20080805705121.html.
35. Mozambique’s government journal, the Boletim da República, series III,
no. 36, November 20, 2009 announced that Cif-Moz had been registered on September 16, 2008. The company’s joint owners were named as China International
Fund, with 80 percent of the equity, and SPI-Gestão e Investimento SARL, with
20 percent.
36. The website of Mozambique’s cadastro mineiro, the government body that
oversees the mining industry, records that Cif-Moz applied for a license to prospect for limestone in the Matutuine district, number 2564L, on March 17, 2008.
The five-year license was granted on November 30, 2009. It was canceled at some
point before May 26, 2014, when I checked the cadastro’s website, portals.flexi
cadastre.com/Mozambique/EN.
37. “Chinese Companies Plan to Prospect for Raw Materials in Mozambique,” Macauhub, December 6, 2010, www.macauhub.com.mo/en/2010/12/
06/chinese-companies-plan-to-prospect-for-raw-materials-in-mozambique; “It’s
Mine,” Africa-Asia Confidential, February 2011, www.africa-asia-confidential
.com/article-preview/id/530/It%e2%80%99s_mine.
38. Letter from China Sonangol in response to my questions ahead of the publication of a report on the Queensway Group in Financial Times, July 18, 2014,
www.ft.com/chinasonangolresponse.
39. Mahmoud Thiam, telephone interview with author, December 2013. See also
Laura Rena Murray, Beth Morrissey, Himanshu Ojha, and Patrick Martin-Menard,
9781610394390-text.indd 281 1/13/15 12:15 PM
282 notes to chapter 6
“African Safari: CIF’s Grab for Oil and Minerals,” Caixin, October 17, 2011, http://
english.caixin.com/2011-10-17/100314766.html, and “Top Salesman for China
Sonangol,” Africa Energy Intelligence, January 12, 2011, www.africaintelligence
.com/AEM/oil/2011/01/12/top-salesman-for-china-sonangol,87388022-ART.
40. The Tsimoro oil field potentially held a billion barrels of crude. It already
had a proprietor, a London-listed junior oil-exploration company called Madagascar Oil, but there were rumors that the government was planning to confiscate
the oil field. Despite China Sonangol’s efforts, Madagascar Oil clung to the Tsimoro field.
41. Thiam interview.
42. Paul Midford and Indra de Soysa, “Enter the Dragon! Are the Chinese Less
Likely to Extend Politico-military Support to Democratic African Regimes?” paper prepared for the International Studies Association’s annual meeting, New
Orleans, February 2010.
43. “African Economic Outlook 2013,” African Development Bank, www.
undp.org/content/dam/rba/docs/Reports/African%20Economic%20Outlook
%202013%20En.pdf.
44. Lamido Sanusi, “Africa Must Get Real About Chinese Ties,” Financial Times, March 11, 2013, www.ft.com/intl/cms/s/0/562692b0-898c-11e2-ad3f
-00144feabdc0.html.
45. Mahamadou Issoufou, interview with author, London, June 2012. See also
Tom Burgis, “Niger Leader Urges Action on Mali,” Financial Times, June 12,
2012, www.ft.com/intl/cms/s/0/37f4b60e-b49a-11e1-bb68-00144feabdc0.html.
46. Abdoulaye Massalatchi and Geert De Clercq, “Areva’s Niger Uranium
Mines Shut for Maintenance as Licence Talks Continue,” Reuters, January
3, 2014, www.reuters.com/article/2014/01/03/areva-niger-closure-idUSL6N0KD
23620140103.
47. Abdoulaye Massalaki, “Areva Signs Uranium Deal with Niger, Delays
New Mine,” Reuters, May 26, 2014, http://uk.reuters.com/article/2014/05/
26/areva-niger-idUKL6N0OC2TB20140526; Alice Powell, “Niger Finally
Sign Uranium Contract, But Is It a Fair Deal?” Publish What You Pay, May 27,
2014, www.publishwhatyoupay.org/newsroom/blog/areva-%E2%80%93-niger
-finally-sign-uranium-contract-it-fair-deal.
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