CAMEROON: EXPECTATIONS FROM MINING INVESTMENTS FUEL

UNCLAS SECTION 01 OF 02 YAOUNDE 001033

SENSITIVE
SIPDIS

DEPARTMENT FOR AF/C, AF/EPS AND EEB
PARIS AND LONDON FOR AFRICA WATCHERS

E.O. 12958: N/A
TAGS: PGOV PHUM EMIN ECON ELAB CM
SUBJECT: CAMEROON: EXPECTATIONS FROM MINING INVESTMENTS FUEL
TENSIONS IN EAST AND NORTH


1. (SBU) Summary: Facing sluggish economic growth, declining oil
reserves and under- and unemployment that have rendered the
population volatile, the Government of Cameroon (GRC) has hitched
its economic development to a series of ambitious mining projects.
Recent visits to the East, Adamaoua, and North provinces revealed
impatience and frustration from exactly those populations that have
the most at stake from the promised development. Inhabitants of the
East and North provinces especially have grown impatient with
repeated promises of jobs and investment with negligible tangible
follow up, a resentment exacerbated by significant migration of
job-seekers from other provinces, fanning local resentment and
ethnic tensions. The GRC and its partners, including American
entities Geovic and Hydromine, will need to improve their outreach
or risk inviting negative blowback. End summary.


2. (U) Emboffs recently traveled to the East, Adamoua, and North
Provinces to learn how realities on the ground matched the GRC's
call for more investments in the mineral sector and especially to
see how local populations were reacting to these upcoming economic
changes.

The East Province: Locals
Impatient with American Geovic
--------------



3. (U) Emboffs met with a number of government officials and other
observers in Cameroon's East Province, where a consortium led by
American company Geovic is planning to mine cobalt (for use in
rechargeable batteries, airplane parts and other industrial
processes). Cameroon has no industrial mining; among the half-dozen
mining projects on the GRC's drawing board, Geovic is the most
advanced, by at least two to three years.


4. (SBU) Adolphe Lele Afrique, the Governor of the East Province,
bemoaned the province's poverty, which has persisted despite
repeated promises of development and a wealth of natural resources,
including gold, nickel, cobalt, manganese, iron, rutile and bauxite.
Many of Cameroon's most ambitious projects--including the
construction of the Lom Pangar dam, the mining projects of Ngaoundal
and Lomie--are situated in the East Province, but the population is
too poor and uneducated to take advantage of the skilled jobs that
might be created, leading to resentment of the better-positioned
economic migrants from other provinces (and ethnic groups).


5. (U) The East Province's economic backwardness is evident in the
artisanal mining sector. Local populations, including the Bayas and
Kakas, and migrants from Cameroon's North, practice dangerous and
difficult artisanal gold mining. The GRC has tried to bring some
regulation to the sector, issuing special identity cards for the
mining work force and creating, with funds from multilateral debt
relief, the Small Scale Mining Support Mechanism (known as CAPAM,
its French acronym). CAPAM is a government agency charged with
disseminating information on administrative resources, technical
training, and the commercialization of outputs. CAPAM has succeeded
in organizing mine workers to form common initiative groups known as
"gicamines." Each year, CAPAM provides the gicamines with shovels,
crowbars, wheelbarrows and motor pumps. The mining is still
dangerous and relatively unregulated--children are often used to
descend into the pits--but CAPAM has made some efforts to improve
conditions, providing funding for a primary school, for example. In
a sign of the GRC's ambition to enhance mining activity, the
Ministry of Mines and Industrial Development recently granted the
Korean-Cameroon Mining Corporation (KOCAM) a license in early 2008
to dig and start semi-industrial mining.


6. (SBU) Jean-Edouard Massamah, a Lomie municipal official, vented
to Emboffs his frustration with Geovic's project, which he derided
as a "hoax." He complained that nothing had been done in more than
a decade while the CAMIRON [Australian-led] iron ore project at
Mbalam had moved further in just a few years. Comment: As Emboffs
countered, the comparison between CAMIRON and Geovic is inaccurate.
Geovic is widely viewed as having blazed the regulatory trail that
CAMIRON and others are now following. Far from a "hoax," Geovic is
Cameroon's best hope for industrial mining in the near future and a
project that has earned the confidence of institutional investors
like Citigroup. End comment. Massamah admitted that his
frustration, shared by the local population, is based on his
experience with logging projects, where operations and payoffs to
the local community begin immediately. In the mining sector, by
contrast, the need for long-term planning and new infrastructure
delays the return to the local community.

The North Province: Uranium
Projects Yet to Materialize
--------------

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7. (SBU) In Cameroon's North Province, a long-promised project to
develop uranium deposits in the Faro Division region of Poli has
been the subject of speculation since at least the early 1970s. A
Canadian mining operation, Nu Energy, has been replaced (in a
hostile and opaque series of maneuvers) by Mega Uranium, a
Cameroonian entity recently awarded a five year exploration permit
from the Ministry of Mines and Industrial Development. The
population is particularly sensitive to the risks of uranium, and
the Catholic NGO "Justice and Peace" moderated a May 2008 town hall
meeting to discuss the proposed development as well as rumors of
contamination of local lands and populations.

Adamaoua Province: American-led
Hydromine Faces Skeptical Population
--------------


8. (SBU) Similar events are unfolding in Adamaoua Province, where
the US-led Hydromine consortium announced the development of a large
bauxite mining operation that promised jobs and increased
development. In September, Hydromine obtained a long-sought 18
month extension on its exploration license. However, in a recent
meeting with the Ambassador, Adamoua Governor Enow Abrams Egbe
emphasized the growing hostility by the local population towards
Hydromine. A lack of information on the part of the consortium,
paired with a lack of perceived progress is increasing frustration
while further reducing the credibility of investors and of the
regional government. He stressed the necessity for more open
communication between the operation, the populace, and the local
authorities.

Internal Migration and Ethnic Tensions
--------------


9. (U) In all of these regions, the "buzz" about mining projects
has attracted people from other regions of Cameroon. Adolphe Lele
Afrique, the Governor of East Province who previously served as
Prefet of Benoue Division in the North Province, told Embassy staff
that migration was linked to the anticipated economic development
that mining industries would generate soon. He added that this made
the situation potentially explosive in all the regions being
considered for mining investments.


10. (U) In Lomie, for example, the project attracted migrants from
the Center and West Provinces of Cameroon. Geovic's preliminary
hiring, which favored the better educated, often better qualified
migrants from the West Province, led some local elites to criticize
publicly the migrants, which added to the tensions. The Sous-Prefet
of Lomie, Bitounou Owona, deplored the difficult coordination among
local elites and told Poloff the government would be watching the
situation carefully.


11. (SBU) In Poli, the migrants mostly came from the Far North
Province. According to Prefet Mbiwan Nchaffu the composition of the
population of the Division has drastically changed in the last ten
years, growing to a point where migrants outnumbered locals. He was
concerned for the implication on local job prospects since people
from the Far North are seen as hard workers and better educated. He
and others commented that the imbalance in the population is
starting to create ethnic tensions which could exacerbate when job
recruitment begins.


12. (SBU) Comment: The frustration expressed by the populations
we visited is disquieting, but not surprising or unique; no region
of Cameroon can be said to be "developed," and impatience is running
high around the nation. The bitter nativism of local communities is
unjustified (the jobs should be offered to the most qualified
candidates, regardless of ethnicity),but understandable; with so
few opportunities for work, it is unsurprising that local
communities would feel protective. Foreign companies make an easy
target for frustrated local populations who, in today's Cameroon,
have very low expectations that government will provide solutions or
create jobs. Potential investors would be wise to enhance their
communication and outreach with the local populations (and we will
reiterate as much with Geovic, Hydromine and other American
projects) because they run the risk of incurring the population's
wrath. However, the responsibility also rests with the GRC, which
has yet to prove it is capable of facilitating an industrial mining
project.

GARVEY.