Governments in Africa are taking steps to lure more investors to
their mining sectors with friendly legislation and attractive tax
breaks. One example is Cameroon, which has just wrapped up a deal with
an American-led consortium to explore and exploit a bauxite deposit.
The project will curb dependence on the country’s slumping oil reserves
and create thousands of new jobs and infrastructure development. Voice
of America English to Africa Service reporter Ntaryike Divine, Jr. in
Douala says thousands of jobless Cameroonians are rubbing their palms
in anticipation of employment when a giant bauxite mining project takes
off in three years.
Experts say world demand for
bauxite will surge by 2011. They anticipate by then the current
financial crisis will have eased and expect increased activity in
housing construction and the manufacturing of automobiles and aircraft.
All of those sectors require bauxite, the main raw material
used to produce aluminum.
A consortium called Cameroon
Alumina Ltd will carry out the venture. It is led by an American mining
company, Hydromine, and includes Dubai Aluminum from the United Arab
Emirates and India’s largest smelter and bauxite mining company,
They will spend six billion U.S. dollars over the next 18 months.
figure includes an environmental impact study. Peter Briger, chairman
and CEO of Hydromine, says getting the project underway will require
the creation of some 15,000 jobs, either directly or indirectly. He has
assured the Cameroon government that local labor will receive
preferential treatment in hiring.
There are two
locations for the mining project, Ngaoundal and Minim Martip, some 600
km north of Cameroon’s port city Douala. It will be designed to
last between 50 and 70 years. Experts estimate the area holds two
billion tons of bauxite, making it the sixth biggest bauxite reserve
worldwide. When operations are underway, Cameroon Alumina Ltd plans to
produce between two and three million tons yearly from the two sites.
is currently ranked the world’s largest bauxite producer. It holds 30
percent of global reserves and accounts for 94 percent of the
continent’s total production. Bauxite is a mineral ore that is first
transformed into alumina and then smelted to obtain aluminum, an
industrial metal used in the manufacture of roofing sheets, kitchen
utensils, processed foods and drinks cans, aircraft and cars.
was first discovered in 1821 by a geologist at a ruined southeastern
French medieval town, Les Baux, which gave its name to the mineral --
Economists say worldwide demand will soar in two
years. Aluminum, however, suffered its worst price slump at the London
Metal Exchange this November. But economists say they expect a boom.
project will provide work in a country of 18 million people suffering
from 30 percent unemployment. Among the projects planned are
infrastructure, such as a railway linking the mining sites, a
hydro-electricity dam and a seaport to ease exports of the product. The
government says the railway link will open up remote parts of the
country’s northern region and at the same time allow farmers access to
markets. The dam will address energy deficit problems, while the
envisaged seaport will significantly decongest Cameroon’s lone port in
The project will also build schools and
hospitals as part of a corporate social responsibility agreement that’s
part of the deal with the government.
The government says
the project is a major milestone aimed at boosting the country’s low
economic growth. The government passed mining legislation in 2001
granting investors incentives such as a five-year tax break and the
free transfer of capital out of the country. But poor infrastructure,
red tape and corruption have stalled development.
two-year-old government campaign to attract investors to the sector now
seems to be paying off. In the last two years, some 63 mining permits
have been handed out, as the country seeks to curb dependence on oil
production. That sector – which had climaxed the 1980s – is now in
Officials say Cameroon is teeming with
reserves of other minerals like cobalt, nickel, uranium and iron ore.
And major global mining companies like Sundance, Geovic and Rio Tinto
Alcan are planning further investments there.
the government has cut its 2009 economic growth forecast from 6.5 to 4
percent following slumps in the world market prices for oil and metals.
Officials hope for a recovery in the international economic situation
and a return to past years, when soaring commodity prices attracted