Guinea-Chinese deal rests on $100 mln deposit

A Chinese fund has paid Guinea's ruling junta a $100 million deposit to guarantee a mining deal but the vast future proceeds seen flowing from the accord remain uncertain, Guinean sources have told Reuters.

Moussa Dadis Camara, was initially valued at $7-9 billion and seen as a lifeline to a government facing international isolation.

But the wording of the accord stipulates that even the initial deposit cannot be touched by the junta, according to the sources, while any future revenues depend on whether the West African state can return to some sense of stability.

"They have made a deposit of $100 million into the central bank, but we cannot touch it," said a Guinean central bank source who requested anonymity.

"They (the Chinese) know there is a risk that if there is a change in power, their agreement will be cancelled," a separate government source said of questions hanging over the country's future leadership while Camara recovers in a Moroccan clinic.

Defence Minister and Camara loyalist Sekouba Konate has taken temporary control of the country, the world's top exporter of the aluminium ore bauxite and home to operations of major firms like Rio Tinto ( RTP - news - people ) <RIO.L>, Alcoa ( AA - news - people ) <AA.N>, and RUSAL.

The country is also believed to have untapped reserves of iron, gold, diamonds, and offshore oil and natural gas.

While there has been no move to impose a broad trade embargo in Guinea, it faces a ban on arms imports and junta members have been targeted with visa bans and other sanctions since a Sept. 28 crackdown on pro-democracy marchers that killed over 150.

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