BISSAU, May 8 (Reuters) - Toronto-listed Canadian miner GB Minerals plans to invest $175 million to begin producing phosphates in Guinea Bissau in 2017, a first for the West African country, its chief executive said.
Guinea Bissau is seeking to revive its economy after a military coup in 2012. The International Monetary Fund says it is on track to nearly double growth to 4.7 percent this year.
“This will put Guinea Bissau on the mining map. The plan is to deliver our feasibility study to the government in July. Then we are looking to be financed by year end and producing in 2017,” Luis da Silva told Reuters.
The project also entails a new port at Ponta Chugue, east of the capital Bissau on the Geba River. From there, the phosphates will be exported to international markets.
Da Silva said he hopes some of the phosphate, used to make fertiliser, will be absorbed by countries in the West African region where demand is growing fast.
Phosphates were discovered at the Farim site, northeast of the capital, in the 1980s although successive investors have never started output, partly due to political instability.
Da Silva says that high costs of political risk insurance between 2012-14 after the coup were prohibitive.
Prime Minister Domingos Simoes Pereira, elected a year ago in a peaceful vote, says the government is reviewing contracts signed under previous administrations to ensure they are fair and that partners have the means to invest.
A four-year government strategy paper released in September listed the Farim project as one requiring “clarifications before it could be integrated into the development programme”.
Asked to comment on the impact of the review on its operations, da Silva said: “The agreement was ratified by multiple administrations and we have full confidence in our collaboration with the government to make this project a success.”
The country’s other major mining project is the Bauxite Angola mine in the southeast at Boe.
Most of Guinea Bissau’s roughly $250 million in annual revenues currently come from cashew and fish exports. (Reporting by Emma Farge; Editing by Joe Bavier)