Cameroon Tribune (Yaoundé)

7 August 2014

Cameroon: 'We're Putting Order in the Mining Sector'

Dr Fuh Calistus Gentry, Secretary of State in the Ministry of Mines, Industry and Technological Development in an exclusive interview with Cameroon Tribune explains the diificulties the mining sector is going through in Cameroon and what government is doing to set records straight.

Mr. Minister, there has been a consistent reduction in the contribution of the mining sector to the country's growth in spite of the enormous potentials. What accounts for this?

I would rather say there has not been a consistent growth in the contribution to the country's development. The mining sector takes a long time to develop. We gave permits. Normally according to the old law, these permits can legally be managed for 11 years just looking for minerals. We revised the law recently to make it that the maximum time to look for minerals is seven years. That tells you that it's an activity that has a long gestation period because it needs to find something in quantities that are substantial in order to warrant financing that sometimes involves many nations, banks and sometimes necessitating displacements of communities. So, when that thing is found in a reasonable quantity then, it leads to a feasibility study which involves finding out whether it is worth the trouble displacing people and what impact it has got on the economy of the nation. All these aspects of environment, taxation are looked upon and it is then that it works up to a bankable feasibility. Again, there are projects that would be operational for 25 years. That is why a mining lease is up to 25 years and a project can go up to 50 years. People putting in the money are not in Cameroon and so there is need for so many assurances before engagements are undertaken. That is why these projects take a long time. Added to these is infrastructure that need to be developed.

But Cameroon is over 50 years old as an independent State. Concretely, what quantity of what mineral is produced for what impact to the government and local population?

Sometimes around the First and Second World Wars, Cameroon was a major producer of titanium. Now, with big mining companies, their targets are well defined. For example, we brought in the mining code that allows companies be guaranteed of the security of their investments only in 2001. Before that period, only bilateral agreements could be done in Cameroon. The advent of mining was only when that code was put in place which gives a clear picture of who gets what. What we produce now is gold and diamond by artisanal means. Most of the other minerals we produce which CAPAM did some efforts in places are all semi to precious metals which are easily attractable by artisanal means. Others like iron ore, uranium, bauxite are at various stages of feasibility realization. We are talking here about hard minerals because in the petroleum and gas sectors, there is a lot of production.

A few years back your ministry, through CAPAM, launched Operation Gold to canalize gold into the formal circuit of the economy. What become of the campaign?

The operation was to buy gold that is produced so as either to be put as gold reserves or exported to bring export earnings to the country. CAPAM did not have money as it had to rely on handouts from the Ministry of Finance to buy the gold. What was given to CAPAM was not enough to buy gold even from one producer. That campaign has been structured in a new way now. The Prime Minister has just signed a text which stipulates that 15 per cent of all the gold produced by any mechanized artisanal mining company will be subject to conditions of large-scale mining in terms of taxation and State participation. In this regard, these companies will be subject to paying corporate tax which we have evaluated into the quantity of gold that is approximate. This is because the places are remote. 70 per cent of this will be given to the Ministry of Finance and they will give back 30 per cent which will be used to continue buying gold. We believe that after some time, the fund will grow in such a way that it can buy all the gold produced which will solve the problem of why Operation Gold failed. Again, 10 per cent of it will be used to develop projects where these activities are taking place like water, school, health centres so that the populations of these areas can benefit. We have also installed inspectors on each site composing five people; a CAPAM representative, representative of the administration, a gendarme officer, police officer and a representative of the company. They will give the production values otherwise our collection will be useless. Part of this money will be used to pay them because if they are not properly paid, they will be corrupted and they will not give true values. There is also a supervisory committee that will go down the field to ensure that all this is implemented. From this month of August, there will be order in the mining sector and artisanal mining will start giving money to the State.

There has been much talk about anarchy and illegal exploitation in the sector but sanctions are rare to come by. What explains for this? Is there complicity somewhere?

The illegality was instituted by the fact that the law gave the right of the small-scale mining only to Cameroonians. These are people who think that artisanal mining means that you should take a spade and a hoe to a mining site. It is a surface phenomenon. In Brazil, Ghana, Colombia, Peru, South Africa... , different levels of mechanization and sophistication are involved. So, our own artisanal mining could not be able to get a simple washing plan to recover the gold. So, they called on the expertise and financial capabilities of people from outside Cameroon and that is where illegality set in. And these people came and use other Cameroonians to take licenses. There was no basis on which to levy any tax because the only tax they paid was advalorem tax. Even that, they did not declare any real figures. So, it was a tax-free activity. We couldn't do much because there were no texts that gave us the ability to walk in and create order. These texts have been signed. Permits were given randomly and we have put a stop to it. Permits will hence be given to people only when the location of their sites can be identified. When we will resume giving permits for artisanal mining, it will be done in a strict manner and under the supervision of the Minister and not the regional delegate as was the case before.

There are complaints that companies with exploration licenses end up digging up everything without authorization. What is being done to halt the unorthodox practice?

Most artisanal licenses are found within exploration licenses. If the artisanal operation was done under the appropriate laws, problems would not have arisen. For example, nobody in an artisanal mining project can use more than three excavators under the new text. These operations are not supposed to compete with large-scale mining because the people who do large-scale mining have their interest deeper and artisanal mining helps them to locate what they are looking for. Now, before an artisanal mining permit is issued, the owner must be informed by the State. We do not also encourage people who have exploration licenses to get into artisanal mining because they will not develop that large-scale mining. When this order will reign, it will have a triple effect as the environment, taxation and the rest will become beneficial to the State, the local population will benefit from the activity through small projects and also large-scale mining will get a boost as we will encourage miners to concentrate on their permits, failure of which we will withdraw them.

What does the law say about exploration licenses? Do they expire and after how long?

Before 2010, it allowed that you take an exploration license for three years and you could renew it four times. That gave you 11 years to play around. An exploration license was given over a space of 100 square km. Now, the period that when you start the project you must develop is seven years. Again, the land surface area is reduced to 500 square km. These are all innovations we believe will allow people to explore quickly. These are all measures to avoid speculation and that even if people speculate, the State should benefit from the speculation.

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