A new mining project in Senegal involving the world's largest steelmaker ArcelorMittal is bringing out hope but disgruntlement as well. The government is promising jobs and infrastructure development, while residents of mining areas fear more pollution and persistent poverty. VOA's Nico Colombant has more.

A short welcoming ceremony in Faleme, eastern Senegal, was recently followed by a long speech by the Minister of Mines Ousmane Ngom.

He said the deal between the government and Luxembourg-based ArcelorMittal to develop iron mines in Faleme will bring in hundreds of billions of CFA francs, which would be about $250 million.

Senegal's media says extraction will begin in 2012, but the government is already busy promoting the project.

Minister Ngom said the whole eastern region will benefit, and that between 10,000 to 20,000 new jobs will be created. He said the company will also build Senegal's first steelmaking plant, as well as roads, bridges and a new health center.

Senegalese President Abdoulaye Wade speaks at a conference in Rome, 19 Jun 2008

He said it was very important for President Abdoulaye Wade that local populations benefit.

One of many other promises he mentioned was a program of grants for students to attend university for free.

ArcelorMittal also held an information session on Senegal's main university campus in the capital Dakar.

The rector of the Cheikh Anta Diop school, Abdou Salam Sall, said his university was ready to adequately train students to become steel managers of the future.

One professor said a partnership with ArcelorMittal would allow the university to finally get out of its ghetto toward the real world.

ArcelorMittal says the world may be facing its first steel shortage in decades. Economic reports say steel companies are running at full capacity, with steel prices surging as India and China build houses and bridges, and their upper classes buy appliances and cars.

ArcelorMittal officials said Senegal could really benefit from this situation.

Steel is an alloy made up of iron and carbon.

Environmentalists say water in mining areas is being polluted

Back in the eastern mining region, residents have heard these promises before. South African company Randgold, and Canadian company Oromin are also mining in the region.

During ceremonies to introduce ArcelorMittal, young men held up placards saying they wanted running water and electricity first.

Thierno Diallo is a youth leader in the mining region's main city Kedougou.

"Since the mining companies have arrived here, we are facing a lot of problems," he said. "The mining companies have taken all our land. We have problems to plow lands. We have no area where we can grow things. Apart from that, they have polluted our environment. Our children have problems to get good education. Young people have problems to get employment. Even the mining companies we have here are not using them. They prefer to recruit young people from Dakar and not people from Kedougou. It is a very bad situation. Government should do something to help people living here."

The leader of a local women's association, Aida Conate says mining companies grab land that was used to cultivate cotton, beans and nuts, and that now many farmers are losing their livelihood. She says lakes which used to be used for doing laundry are dirty now.

She says mining companies or the government should give people credit facilities so they can at least set up new businesses to become petty traders, rather than just watch foreigners get rich off the land they live on.