The partnership contract signed yesterday precedes a mining convention by the end of 2012.
The government of Cameroon has employed the services of a legal adviser on one hand and those of a financial adviser on the other to work with in the multi-billion Mbalam Iron Project in the East Region so as to uphold the interest of the country and the population before, during and after the extraction of the mineral.
The supervisory authority, the Minister of Mines, Industries and Technological Development, Emmanuel Bonde, yesterday August 30, signed a partnership contract with an American Legal Advisory Firm, Patton Boggs represented by its General Manager, Joseph Brand and another with a financial Adviser and Lead Advisor, BMCE Capital, represented by its General Manager for Central Africa, Serge Yanic Nana. The Minister was assisted by the Secretary of State in the Ministry, Dr. Fuh Calistus Gentry.
According to the terms of the 20-page, 10-copy document penned between Emmanuel Bonde and Joseph Brand, Patton Boggs is to guide government on the legal procedures given the stakes of the project coupled with the huge financial engagements involved. Speaking to the press, Joseph Brand sounded upbeat that with his firm's 50-year experience, government could count on it for a hitch-free execution of the project.
Meanwhile as Lead Advisor and Legal Adviser, BMCE Capital is expected to coordinate the entire advisory body so that government's interest is assured in the entire project. It is to assist the State in all financial dealings vis-à-vis the project especially in the mining, rail and ports sectors that constitute focal points in the entire project. Exploration results show that over 300 million iron ore reserves have been discovered on the field and that over FCFA 2,500 billion is needed for the first phase.
Minister Bonde said the project is so huge that a financial expert is absolutely needed to regularly advice government on the negotiation of conventions, on the profitability of the project to the State, on the determination of tariffs to be levied on ports and rail infrastructure as well as on the mechanisms to optimise State revenue in the project.
"We are looking forward to finalising the structure of the project from the legal, financial and technical standpoints and signing all the documentation that is necessary to fund the project from the bank's standpoint. We are expecting before the end of this year to have a mining convention signed. With this, the documentation will move to the banks for the money to be raised after which construction will start. So, we are expecting by 2016 to start off with the commercial operation," the Lead Advisor and Financial Adviser, Serge Yanic Nana, said.
Mining Begins in 2016!
If the calendar of the Mbalam Iron Ore Mining Project is respected to the letter, then real mining could begin in 2016. Negotiations are ongoing between Sundance Resources Limited, whose Cameroon partner, Cam Iron, is to execute the project and the government of Cameroon for a mining convention to be signed before the end of 2012.
Once this is done, experts say, mobilisation of the 5 billion dollars (about FCFA 2,500 billion) needed for the first phase of the project will begin. The second phase of the project to gulp in 4.9 billion dollars (about FCFA 2,400 billion) will begin 12 years after the mining operation. It will consist in constructing and using a mining unit.