On 19 June, President Mamadi Doumbouya announced a ban on raw gold exports, as part of his mining value addition agenda.
- In addition to genuine development goals, the ban is driven by Doumbouya’s eagerness to prevent another coup d’état, given the country’s fragmented political space.
- In light of these political considerations, the authorities will increasingly rely on coercive tactics to enforce local content and value addition requirements, exposing mining operators to contract cancellations and political interference.
- However, because of the need to improve investor confidence and attract foreign capital, the authorities will be open to negotiating with large operators, potentially enabling the latter to push for a phased enforcement of the ban.
- Meanwhile, the regulations of the mining sector will remain erratic, slowing the reform agenda.
Refinery ambitions
Gen. Doumbouya warned that violating the ban could expose mining firms to harsh penalties, including licence revocation and contract termination. He said that the ban will pave the way for the local processing, smelting, and certification of gold through the Nimba Gold Refinery project. The refinery, which is still under construction, has an initial capacity of 250 tonnes per year. Construction is nearing completion, and state-affiliated media claims that it will become operational “soon”. However, according to S&P, the refinery will not be operational until 2027.
Gen. Doumbouya won the 28 December 2025 presidential elections, four years after taking power through a coup d’état. Although his Generation for Modernity and Development (GMD) party was unable to register in time for the elections, pro-Doumbouya political parties secured at least 100 out of the 147 parliamentary seats at the 31 May legislative elections.
Political agenda
As underlined by the ban, the Doumbouya administration will increasingly rely on aggressive and coercive tactics to expedite the enforcement of local content and value addition regulations. The recent presidential and legislative elections will enable Doumbouya to further consolidate power in the coming years. However, like his predecessors, Doumbouya will remain vulnerable to destabilisation, given the weaknesses of Guinea’s democratic institutions and the fact that military interventions are somewhat seen as legitimate responses to widespread socio-political grievances in the country.
To appease his coalition partners, military allies, and public sentiments, the president will need to boost revenue and increase economic prospects for the population. As the country’s most lucrative and developed sector, the mining sector will bear the brunt of these political pressures. For instance, Doumbouya is likely to follow through on his threats to revoke mining licences to deter mining operators from violating the ban.
Challenges for Doumbouya
Nonetheless, in our view, large operators will have some room to negotiate their way out of such situations. The urgent need to secure capital to fund mining development, including infrastructure, reduces the government’s bargaining power, especially because the country’s history of political instability hampers investor sentiment. Moreover, in his quest to boost his legitimacy, Doumbouya will need to improve the country’s relations with the international community. Although the AU and ECOWAS lifted the sanctions on Guinea, imposed due to the 2021 coup, earlier this year, the country needs to woo Western partners to boost access to much-needed development assistance.
In this context, large foreign operators are likely to rely on the diplomatic backing of their respective countries during negotiations over the export ban or local content. This does not necessarily guarantee favourable terms for such operators, but in our view, it will make it easier for operators to push for a phased approach. Mining firms will remain prone to political interference, harassment by regulatory authorities, and contract cancellations, but a comprehensive and dynamic government engagement strategy will help large operators reduce prolonged disruption resulting from these acts.
All in all, the enforcement of the recent ban is likely to be erratic, and the government will be open to exempting some large operators. This will slow value addition and local content efforts, particularly because the government may struggle to incentivise artisanal gold miners (who dominate the sector) to prioritise local processing.
Sources
“Guinea bans exports of raw gold to boost local refining” BCC
“Guinea president’s coalition wins legislative majority, results show”, Reuters
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