Identifier
Created
Classification
Origin
09YAOUNDE122
2009-02-05 15:09:00
UNCLASSIFIED
Embassy Yaounde
Cable title:  

CAMEROON'S MINES MINISTER THINKS GLOBALLY, WORRIES LOCALLY

Tags:  EMIN EIND EINV ETRD ECON CM 
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UNCLAS SECTION 01 OF 02 YAOUNDE 000122 

SIPDIS

STATE FOR AF/C AND EEB

E.O. 12958: N/W
TAGS: EMIN EIND EINV ETRD ECON CM
SUBJECT: CAMEROON'S MINES MINISTER THINKS GLOBALLY, WORRIES LOCALLY

UNCLAS SECTION 01 OF 02 YAOUNDE 000122

SIPDIS

STATE FOR AF/C AND EEB

E.O. 12958: N/W
TAGS: EMIN EIND EINV ETRD ECON CM
SUBJECT: CAMEROON'S MINES MINISTER THINKS GLOBALLY, WORRIES LOCALLY


1. (U) Summary. Cameroon's Minister of Mining is increasingly
worried about the impact that global economic trends will have on
Cameroon, especially in the mining and industrial sectors. At the
Minister's request, Post's Economic and Commercial team met with
Badel Ndanga Ndinga, Cameroon's Minister of Mining, Industry and
Technological Development (MINMITD) on February 5, to review the
status of major investments in the sector and the impact that global
economic trends will have on Cameroon. End summary.

Hydromine, Now Cameroon Alumina
Moving Forward
--------------


2. (SBU) Ndanga Ndinga said he had met recently with a visiting
team from Cameroon Alumina (CAL),the partnership formed by American
project developer Hydromine with mining partners from India
(Hindalco) and the United Arab Emirates (Dubal) and that he was
impressed with the progress the CAL team has made at this early
stage of their project to develop the multibillion dollar bauxite
resources located in Minim Martap and Ngaoundal in the Adamaoua
Region. Nevertheless, Ndanga Ndinga warned, the Government of
Cameroon (GRC) would hold CAL to the strict timeline that was agreed
to when CAL received an extension on its exploratory license. In
response to Ndanga Ndinga's concern that the CAL teams in the field
were not communicating with MINIMIDT staff at the regional level,
Poloff committed to share the Minister's concerns with the visiting
CAL teams.

GEOVIC's Six Month Delay
--------------


3. (SBU) Ndanga Ndinga said he was concerned about how global
economic trends would affect Cameroon's economy, especially a number
of high profile projects in the mining sector. He had been
surprised to read through Google alerts that Geovic, an American
company preparing to mine cobalt and nickel in Cameron's East
Region, was delaying its project by six months and had called in
GEOVIC's General Manager to demand an explanation. Ndanga Ndinga
said he accepted GEOVIC's explanation (that the delay was necessary
to install a new technical process that would make the project more
profitable),but seemed to remain suspicious as to whether there
might be additional explanations for the delay. Geovic had been
expected to start construction of the processing facility by June
2009 and first production by early 2010. Poloff reminded Ndanga
Ndinga that Geovic, too, was impatient to begin operations and that
many of the delays up until now have been the result of the GRC's
slow decision-making and implementation.

How Will Rio Tinto's
Travails Affect Cameroon?
--------------


4. (U) In response to Poloff's queries about the viability of Rio
Tinto's ambitious projects to extend the capacity of ALUCAM, the
aluminum processing facility run as a joint venture with the GRC,
Ndanga Ndinga said Rio Tinto's senior leadership had recently
assured him that the project was on track. Ndanga Ndinga said the
ALUCAM plant at Edea continued to operate at lower than peak
capacity because it does not receive the amount or consistency of
power supply from AES-SONEL, the national power provider managed by
American firm AES. Ndanga Ndinga said Rio Tinto and AES are still
at an impasse in their negotiations of a new power contract. As
Poloff and Ndanga Ndinga ticked off the recent slew of announcements
that Rio Tinto was withdrawing from projects and laying off workers,
Ndanga Ndinga showed increasing concern about the future of Rio
Tinto's promise to undertake a multibillion dollar extension of its
investments in Cameroon.

Comment: Warming to American Investment
--------------


5. (SBU) Ndanga Ndinga has been cool to prospective American
investment since he took over the Ministry of Mines in September
2007, so we were encouraged by his decision to reach out to us. His
previously abiding hostility to the Hydromine-led project has
softened into a wary watchfulness, largely because the project has
taken great strides in its transition to Cameroon Alumina (CAL) but
perhaps also because it is increasingly apparent that Rio Tinto's
financial difficulties will strain their ability to follow through
on their projects in Cameroon. Ndanga Ndinga is plugged in to the
internet and attuned to international economic trends, refreshing
traits in a regime that often seems myopically inward-focused.


6. (SBU) Cameroon has high hopes that an energized mining sector
can replace the revenues due to be lost to declining oil reserves,
but there is still no industrial mining in Cameroon. Especially now
that the international economic climate is unfavorable for
big-ticket, high risk investments, Cameroon will be forced to make
itself all the more attractive to prospective investors. End

YAOUNDE 00000122 002 OF 002


comment.

Garvey