Baleine (Whale) and Simandou: The two lungs of a dynamic Africa

  

OPINION | ECONOMICS & STRATEGY

Whale and Simandou: The two lungs of an Africa that no longer just wants to "look"

By Oudi the Neophyte

On either side of the border that separates Côte d'Ivoire and Guinea, two names resonate like the new commandments of West African economic sovereignty: Whale and Simandou. If one lies at the bottom of the Atlantic Ocean and the other is buried in the bowels of the mountains of the Guinean ridge, they share the same promise: that of radically changing the destiny of two nations.

But beyond the splendour of the figures, are these two projects really twins of the same ambition?

Two giants, one alarm clock

Baleine (Ivory Coast) and Simandou (Guinea) are what geologists call "Elephant" projects. On the one hand, the largest oil and gas deposit ever discovered in the Ivorian sedimentary basin. On the other, the largest unexploited high-grade iron deposit in the world.

The first similarity, and undoubtedly the most striking, is the resumption of power by states. In Abidjan as in Conakry, the era of "laissez-faire" seems to be over. In Côte d'Ivoire, the state has deployed unprecedented financial mastery — a sovereign guarantee of 10 billion euros — to increase PETROCI's shares to more than 22%. In Guinea, the regime has forced the giants Rio Tinto and the Winning Consortium to join forces to finance the Trans-Guinean Railway, a $20 billion infrastructure infrastructure for which the state is the central arbiter.

Infrastructure Shock: Pipe vs. Rail

The fundamental difference between these two ambitions lies in the transport infrastructure. For Baleine, the challenge is that of the gas pipeline. It is an invisible but vital cord that must transport natural gas from the depths of the sea to Abidjan's thermal power plants. The challenge here is the stability of the flow: transforming a raw resource into constant electricity to light homes and run cocoa processing plants. The pipeline is the infrastructure of energy performance.

For Simandou, the challenge is on a completely different scale: it is the Transguinean. This 670 km railway is not just a simple railway for rail; It is designed as a multi-use development corridor. Unlike the gas pipeline, which is specialized, Guinean rail is intended to transport goods, agricultural products and passengers. It is an infrastructure of space sovereignty that aims to break the isolation of inland regions. Where the Ivorian pipe seeks invisible efficiency, the Guinean rail seeks the visible transformation of the national economic landscape.

Funding strategy

Two giants, two methods of sovereignty: Banker vs Grantor

Beyond geology, it is in the field of financial engineering that the real game is being played. While Abidjan and Conakry are both aiming for sovereignty, their paths diverge radically.

The Ivorian model: The State as a co-investor

Côte d'Ivoire has chosen to be an offensive player. By committing a sovereign guarantee of 10 billion euros, it enabled PETROCI to increase its stake to 22.75% of Baleine's capital. This is the gamble of strategic debt: the state takes on debt in order to own a larger share of the deposit and receive dividends earlier. It is a bet on direct and immediate profitability.

The Guinean model: the State Concession

Conversely, Guinea has manoeuvred without committing its signature on bank loans of 20 billion dollars. His "mastery" is based on three pillars:

1. "Free Carry": Unlike Abidjan, Conakry has negotiated free and non-contributory shares. The state owns 15% of the mining project and 15% of the Compagnie du Transguinéen (CTG) without disbursing a cent or guaranteeing a loan.
2. Off-balance sheet commitments: Instead of cash, Guinea guarantees legal certainty, fiscal stability and the release of land for the 670 km of rail.
3. The return of assets: This is the heart of the CTG set-up. The private partners (Rio Tinto and WCS) are financing all the infrastructure. In exchange, they exploit the iron, but at the end of the concession (30 to 35 years), the rail and the port return to the Guinean state's heritage free of charge.

Risk in the service of social issues?

This comparison raises a fundamental question for our economies. If Côte d'Ivoire is able to commit a guarantee of 10 billion to be a "co-investor" in oil, why can't it use this same "mastery" to guarantee loans for social housing or local industrialization?

On the one hand, we have a state that behaves like a banker of its own subsoil (Côte d'Ivoire), and on the other, a state that behaves like a demanding landowner (Guinea). In both cases, success will not be financial, but social.

The Common Challenge: Avoiding the Glamour

The real question, the one that burns the lips of citizens in Conakry as in Abidjan, remains that of the real impact on daily life.

The Ivorian paradox is striking: despite the barrels of whale, the price of a kWh has increased. The Guinean risk is similar: that the Simandou iron ore will only be a transit corridor to China, without the railway being used to transport agricultural products or Guinean travellers.

In both cases, the "mastery" shown by states in the face of multinationals (Eni for one, Rio Tinto for the other) will only be validated by a single metric: runoff.

Conclusion

Is Simandou the "Whale" of Guinea? Yes, by its ability to make the State a respected and feared partner. But while Côte d'Ivoire is playing its place as a regional energy hub, Guinea is playing its national unity through rail. For the "neophyte" that I am, the conclusion is simple: these two projects are not only resource exploitations, they are maturity tests for our governance. It is not enough to possess wealth, it is necessary to have the courage to bring it into every home.

 

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Signed: OUDI the Neophyte