Guinea demands former ministers repay mines cash

CONAKRY, March 8 Sun Mar 8, 2009 2:16pm GMT

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CONAKRY, March 8 (Reuters) - Guinea's military junta has demanded that four former mines ministers repay more than $5 million it says they embezzled from the state, according to a senior official.

The televised accusations came less than a month after security forces detained the former president's son, who later publicly confessed to involvement in drug smuggling.

At the time, human rights campaigners expresSed concern at the methods employed by the West African state's rulers, who took power in December after the death of long-serving President Lansana Conte.

The junta's audit committee said in a interrogation of the former mines ministers broadcast on state television on Saturday night that Ahmed Tidiane Souare, Ousmane Sylla, Ahmed Kante and Louceny Nabe owe around $5.3 million in total.

It claimed almost half of this amount from Souare, who served as mines minister between 2005 and 2006 but was Prime Minister when Capt. Moussa Dadis Camara's group seized power.

"These funds were intended for the promotion and development of mining, and they were totally misappropriated," said Mouctar Balde, vice-president of the committee.

"They (the ministers) have given us explanations but mostly, they have not convinced us," he said.

The ex-ministers made no comment in the broadcast.

Mining is a major source of state revenue in the world's top exporter of aluminium ore bauxite, and international firms such as Rio Tinto (RIO.L), AngloGold Ashanti ANGJ. and RUSAL are active in the sector.

Analysts say senior figures in the Conte administration used foreign mining firms to enrich themselves, depriving the treasury of much-needed cash. Camara's willingness to tackle corruption is seen by industry experts as key to foreign firms' perception of the risk of doing business in Guinea.

"A file has been handed to the Ministry of Justice and the chief prosecutor," Balde said.

Guinea's military rulers, widely criticised for their coup, are under pressure to restore civilian rule and have promised polls before 2010 as well as to fight drug trafficking and corruption.

Last month Ousmane Conte, son of Guinea's late president, said in a televised confession filmed after an all-night interrogation that he had been part of a drug smuggling network.

Falling metals prices on world markets are expected to hit Guinea's income as mining revenues fall.

After shipping a record 13.7 million tonnes of bauxite exports last year, Compagnie des Bauxites de Guinee -- 51 percent owned by a joint venture controlled by Alcoa (AA.N) and Rio Tinto and accounts for 80 percent of Guinea's mining income -- has already had to cancel some shipments in 2009.

For a FACTBOX on mining firms with operations in Guinea, click on [ID:nLN419384].

(Writing by Daniel Magnowski; Editing Ralph Boulton)