A new mining era for small and big firms.
Over the last few years, the Cameroon administration has launched a charm offensive to attract investments by the large international mining companies. They have identified that developing the mining sector can boost the country's economic growth. Only the oil sector had previously recognised the potential of Cameroon's extractive industries.
Some 50 varieties of minerals have been identified as present in Cameroon in sufficient quantities for viable commercial exploitation. Diamonds are found mainly in the south-east area, around the region of the borders with Congo and the Central African Republic. Gold is also present in significant quantities in this region as well as on the Adamoua plateau. Yet the Ministry of Mining has identified fewer than 140 gold targets and 19 diamond targets.
Cameroon's mineral exploitation is mainly being undertaken by small-scale enterprises that have been encouraged by 2001 legislation that boosted artesian mining. Modern, large-scale mining will take time to get established, but with the collaboration of the French Bureau of Geology and Mining Research, exploration activities have been stepped up to identify large deposits of minerals suitable for commercial exploitation.
SUSTAIN SMALL-SCALE AND INDUSTRIAL EXPLOITATION
Last July, the government launched an organisation to support and promote small-scale mining. Dubbed CAPEM, its mandate is to organise and develop the small-scale mining sector in Cameroon, and help integrate it into the formal economy. It also aims to improve the working conditions of small-scale miners. The CAPEM programme will be implemented at 28 sites, in six of Cameroon's 10 provinces where small-scale mining has been established.
The government will inject CFA4.5bn ($11.13m) in funding to develop this programme. Since CAPEM was inaugurated, the small-scale mining sector has already generated 5,000 new jobs and government expects that number to reach 15,000 jobs by 2010. CAPAM should, through an efficient reorganisation of the artesian mining sector, put an end to the dangerous, clandestine exploitations of gold and other mineral deposits.
International large-scale mining companies are also showing increased interest in mineral exploitation, especially for bauxite used to smelt aluminium. Two main deposits have been identified at Minim Martap and Adamoua in the west of the country, where reserves are estimated at around 2bn tons. Exploitation of these bauxite deposits, some of the richest in the world, is currently constrained by their distance from a seaport as well as the absence of a rail link. The large investments required in transport infrastructure are being undertaken by the US company Hydromin.
Hydromin has been operating in Cameroon for the last three years, and in January 2006 signed a build, operate, transfer (BOT) partnership agreement with the government to exploit the bauxite deposits. Peter L Briger, a former advisor to US Presidents Kennedy and Johnson, chairs the company.
According to Hydromin's director general, Jean Pierre Ndongo Zanga, between CFA2.5bn ($6.18m) and CFA3bn ($7.4m) will be invested in the construction of port infrastructure and the processing of minerals through a consortium made up of Hydromin working with the French group Bollore, the Japanese energy group Marubeni, Hindalco industries and aluminium producers Dubal. The latter has committed to purchasing more than 70% of future bauxite production.
Meanwhile, 60 exploration permits have been awarded around the Jah reserve, and the Lomie cobalt-nickel minefield should begin production at the end of 2008. In 2003, Geovic Cameroun SA, a subsidiary of the American firm Geocam, obtained an exploitation permit for a 1,630sq km 21-year concession to exploit this mine, one of the most important on the continent. The mine's infrastructure is currently under construction.
Unlike many other deposits of this type, this mine contains more cobalt than nickel, which is a more profitable proposition. The Lomie cobaltnickel minefield has the capacity to produce 4,000t of cobalt and 2,000t of nickel a year.
Camsa mining, a South African-Danish consortium has announced its intention to invest CFA34bn ($84.12m) in Cameroon's mining sector, but has not revealed what reserves it will exploit. Nu Energy Corporation Cameroun, a 92% subsidiary of Canadian company Mega Uranium Ltd, has spearheaded that company's first African operations and began exploring for uranium in 2007 at the Kitongo and Teubang sites in the north of the country and Lolodorf in the central region.
The Australian company Camlron has an exploration permit for the Mbalam iron field, located at the border region with Gabon and Congo. Mbalam is believed to contain 567m tons of ore with a 60% iron content and exploitation should start in 2010, together with the construction of a 498km railway line and a deep-water port at Kribi. The proposed total cost of this development is around CFA1,050bn ($2.6bn). The mining agreement, currently being negotiated with the government, should be signed later this year.
Finally, the limestone mines that feed the Lafarge cement plants in Cameroon are rapidly being depleted, but exploration has revealed promising new deposits on the country's littoral to replace these ageing reserves.
As Paul Ntep Gwet, a director of CAPAM, explained to the local press: "In 2003, the country had issued just two permits for industrial mining operations and the activities of the small-scale mining sector were not even monitored. Today, more than 60 mining permits have been issued and there is great activity within the mining sector, reflecting the strong global demand for mineral resources.
"Since the early years of Cameroon's independence, there has been constant speculation regarding the various minerals that the country has, but only oil has been exploited and that rather modestly. The situation is markedly different today."
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|Title Annotation:||CAMEROON COUNTRY REPORT|
|Comment:||A new mining era for small and big firms.(CAMEROON COUNTRY REPORT)|
|Date:||May 1, 2008|
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