CAMEROON: MINISTER OF MINES PROVIDES OVERVIEW OF

UNCLAS YAOUNDE 000043 SIPDIS SENSITIVE SIPDIS E.O. 12958: N/A TAGS: CM ECON EIND EMIN SUBJECT: CAMEROON: MINISTER OF MINES PROVIDES OVERVIEW OF SECTOR REF: 07 YAOUNDE 1428 ¶1. (SBU) Summary: On January 9, Ambassador paid a courtesy call on Badel Ndanga Ndinga, Minister of Industry, Mines and Technological Development, and his mining team. They noted Cameroon's large (though largely untapped) mining potential, including its active artisinal mining sector. The U.S. company Geovic is close to starting cobalt mining, while U.S. firm Hydromine has to demonstrate that its strategic partners are lined up, according to the Minister. He noted the low level of industrial development, asking for assistance in developing industrial norms and promoting mining opportunities. End summary. Mining Prospects -------------- ¶2. (U) Ndanga Ndinga highlighted Cameroon's substantial mining potential, saying the GRC had issued 50-60 permits to research the potential for mining bauxite, gold, iron, nickel, uranium, cobalt and other minerals, covering 40 percent of the country's territory. According to the Ministry's estimates, the six largest projects have a value of more than $107 billion and promise to return more than $2 billion annually to the government treasury (more than double the returns from petroleum) when fully realized. However, only ten permits are active, with no industrial mining yet happening. The Minister and his Secretary General hoped the U.S. could help Cameroon better understand its mineral potential, including developing a mineral plan and better data. U.S. Investments -------------- ¶3. (SBU) The Minister hoped the U.S. company Geovic would start mining cobalt by the end of 2008. His staff noted past problems in defining the scope of the permit, in defining ownership, and in completing the feasibility and environmental studies, but all of these issues have reportedly been sorted out. The Ministry is also hoping to get reassurances from U.S. company Hydromine that its partners, Hidalco and Dubal, are still prepared to make a strategic financial investment in the project. The Secretary of State of the Ministry subsequently told Poloff that Anglo-Australian mining company Rio Tinto has already applied to take over this bauxite mining concession if Hydromine cannot bring its partners to the table before its exploration license expires in March. (We have urged Hydromine to respond quickly to the Ministry's requests.) Artisinal Mining -------------- ¶4. (U) Cameroon hosts significant artisinal mining, including the mining of 300 kilos of gold per month. The Minister wants to mechanize and more formally integrate these small mines. He noted one South Korean investment in small gold mining and hoped U.S. companies could enter this sector as well. He saw potential in increasing diamond mining (Cameroon has some mines in the East) and noted that the GRC adheres to Kimberly process requirements. Industrial Development -------------- ¶5. (U) Minister Ndanga Ndinga conceded there is very little industry in the country (less than 3 percent of GDP),largely limited to agribusiness, pharmaceutical production, the energy sector and artisanal mining. He added that the GRC has started a mining school for engineers and other technical staff, and is working to strengthen the capacity of small scale industrial producers. Ndanga Ndinga also highlighted the need to develop more norms to boost industry's competitiveness. He hoped the U.S. could help develop norms and standards as well as encourage investment in the industrial as well as the artisinal mining sectors. Comment -------------- ¶6. (SBU) Despite Cameroon's tremendous mineral reserves, reportedly including some of the world's largest reserves of bauxite and cobalt, none of it has been mined on an industrial scale. The country's large aluminum plant (owned by Rio Tinto but known as ALUCAM, the French-Cameroonian parastatal that established it) sources all its bauxite from Guinea. One of the new ministers who came in with the September 7 Cabinet reshuffle, Ndanga Ndinga is well regarded and, while he has no mining expertise, he has an experienced senior team looking increasingly seriously at developing the sector. 2008 could be an important year for mining in Cameroon, with U.S. company Geovic hopefully leading the way; as reported reftel, the Hydromine story is more complex and tenuous. The minister was much less versed on his industrial portfolio, which in part reflects the fact that there is so little industry to promote, but also probably speaks to the at times confusing overlap between his ministry and the mandates of other ministries dealing with economic issues. GARVEY