Coup in Guinea drives China’s multi-billion-dollar trade and investment scheme ‘The Belt and Road Initiative’ to more complexity

The coup in Guinea that by overthrowing President Alpha Conde in the previous week, the recent military takeovers in Chad and Mali, as well as an attempted coup in Niger, is adding fuel to complicate China's inroads into the semi-arid Sahel region and parts of West and Central Africa.

The larger Sahel region is gaining agitation like the latest coup could stir to more political disquiet in the region, where China has been eyeing to stretch its multibillion-dollar trade and investment scheme, 'The Belt and Road Initiative'.

The bauxite rich Guinea and also with huge reserves of iron-ore has been suspended from the Economic Community of West African States (ECOWAS), following power seizure by the military.

A large landlocked country spanning north-central Africa, Chad has reserves of petroleum and it is the destination, where China's largest oil producer China National Petroleum Corp is functional, which majorly exports to China, India and the US.

The suspension of the constitution and the military takeover in Guinea is the recent turmoil reported from the region. Alpha Conde was arrested and his government dissolved at the weekend. The country’s borders were closed and nationwide curfews were imposed and promptly withdrawn by the coup leaders, as it is well known that the bauxite and other mining industry is the backbone of Guinea economy.

Guinea’s trouble was spotted in 2020, when Alpha Conde modified the constitution to permit him to rule for a third term in October 2020. However, his comeback was led by aggressive protests in the capital city of Conakry, with the opposition party calling the election counterfeit.

The market responded to the political unrest in Guinea by pushing aluminium prices to a 13-year high on 13th September 2021, in regards to the anticipated unsettling bauxite supply from the second-largest producer after Australia.

Boris Sinitsyn, Head of Metals and Mining Research at Renaissance Capital said: “Apart from supplying European smelters, Guinea is the primary source of material for the Chinese aluminium industry. Bauxite and alumina prices have recently lagged aluminium quotes, while any supply disruption might further propel them.”

China plays a major role in Guinea’s economy, by securing most of its bauxite, and the Chinese companies also have a stake in the country's iron ore reserves, including the world's largest iron ore project, the Simandou mine, which is presently under development.

Col. Mamady Doumbouya, the leader of the coup in Guinea has delivered a commitment to honour all existing mining agreements, but political uncertainty still emerges.

Samuel Ramani, an Oxford University international relations specialist, said: “The Guinea coup poses an immediate risk to Chinese interests, which are concerned about the stability of global aluminium markets.”

"The increase in aluminium prices observed after Guinea adversely impacted China's bottom line. China's calls for the release of Alpha Conde and condemnation of the coup are to be expected but now there is a real material interest at stake."

Ramani further added: “The spate of coups in Mali, Chad and Guinea certainly reduced the Sahel's appeal as a frontier of expansion for the belt and road plan. China was likely to maintain its peacekeeping presence in Mali, but might be deterred from making major new investments.”

"It is hard to see China demonstrably increasing its role as a security provider in the region, even as it views France's apparent commitment to winding down Operation Barkhane with concern, and China might quietly hope France reconsiders its drawdown from Mali," he said.

The Sahel region stretches from the Atlantic coast of Senegal to Eritrea on the Red Sea coast, which is a strategic point for China's trade ambitions in Africa. The emerging superpower’s investments in the region of Senegal, Niger, Chad, Nigeria, Sudan, and Burkina Faso are massive.

China has inked a memorandum of understanding with Bamako in 2020 to cooperate on the belt and road scheme, while the Chinese companies are building railway tracks to connect landlocked Mali to ports in Dakar, Senegal, and Conakry in Guinea

Mohammed Soliman, a scholar at the Middle East Institute in Washington, said: “The Sahel region is central to Beijing's Africa strategy and the Belt and Road Initiative's broader objectives.”

"Indeed, the emerging trend of military coups d'etat threatens the security and stability of the broader region in a way that would jeopardise Beijing's objectives and existing investment in infrastructure projects across the region," he said.

“Like many regional and international players, China is in wait-and-see mode before pursuing a specific policy direction. But early engagement with new rulers is likely to be an option in the meantime.”

John Calabrese, Director of the Middle East-Asia Project, said: “China's approach to peace and security in West Africa and the Sahel is driven by the desire to protect its economic interests and project an image of being a responsible major power.”

He added: “The Chinese economic interests at stake as investments in Niger's uranium mines and Chad's oil sector and the instability emanating from the Sahel had created an opportunity to increase arms exports to, for example, Ghana.”

Calabrese said: “Beijing has donated money (probably upwards of $45 million) to support the G5 Sahel Joint Force's efforts to fight violent extremism. However, beyond that China's security engagement in the Sahel has likely been impeded by its lack of counterterrorism expertise".

Analysts said: “China usually finds a way of working with whoever becomes leader, as it does not want to be seen taking sides. But, China's foreign ministry vocalized Beijing opposed coup attempts as a way to seize power and called for Conde's release.”

David Shinn, Professor of George Washington University's Elliott School of International Affairs, said: "Unless Guinea collapsed into political chaos, I don't think the coup will have much impact on the bauxite and iron ore reserves. They are too important to the country's economy and the new military government seems to be pragmatic."

“Historically China had negotiated changes of government, both legal and illegal, in Africa without significant damage to its economic ties. China has huge interests in both Guinea's bauxite and iron ore deposits. I believe these ties will continue uninterrupted,” Shinn added.

Shinn concluded by saying: “The continuing political instability in the Sahel region may well cause China to reconsider future economic commitments there.”