04/02/2008: One of the things Cameroonians have been longing for is to see the Mbalam iron-ore project begin, if only because it will give the country’s Gross Domestic Product (GDP) growth, an impulse, especially now that poverty is rampant. The essentials that will be required to start the mining operations in the iron-ore fields of Mbalam, located to the south-east of Cameroon, have started arriving, such as office equipment and iron-ore laboratory-testing instruments.
CAM Iron, a limited liability company registered in Cameroon on April 14, 2005, has brought in the equipment. It has 10% shares of the company; the remaining 90% are owned by the Australian company “SUNDANCE RESOURCES”.
The company intends to put in investments worth 3 365 million USD, which is approximately 1 650 Billion CFA francs (more than half the state budget of Cameroon for 2008, which stands at 2 276 billion CFA francs, up from the previous budget by 25 OOO billion CFA francs). The iron production estimates at Mbalam have been put at around 35 million tons yearly. Its reserves are estimated at 1 000 million tons.
Exploitation proper should begin in 2011 and will last approximately 20 years. The National investment Corporation (SNI) could possibly buy over FOKOU iron rod investments so as to use part of the iron that will come in from Mbalam. In fact, the long-term goal of the country is to develop an iron and steel industry in the country. The authorities in government, negotiating this deal, are asking the Australian partners to be part-and-parcel of the deal, as well as to develop the entire port of Kribi, not just a part, as they previously intended to do.
Spin-offs will also include, the development of infrastructures including roads and a railway line (490 km), to link the region to the deep sea port at Kribi. The railway line will take off a thumbing 65% of the investment capital while mining activity will take up 19%.
The impatience the jobless in Cameroonian today are manifesting, including perhaps several thousands more in neighboring Central African Republic is understandable. They look up to the Mbalam project, not only as a job creator, they see it also as a possibility of having technology transferred to them. Those in Cameroon hope that government will take the necessary steps to right some of the errors that were committed while negotiating the construction of the Chad-Cameroon pipeline. The problems that are now beginning to surface, when examined from the standpoint of socio-economic fall-outs, show that it wasn’t well negotiated.
On the field, 10 million CFA francs have been invested in the upgrading of a road from a locality known as Lele to Mbalam. Part of that money has also gone to build a school and to develop the company’s site. According to sources in the Ministry of Industries, Mines and Technological Development, a letter of intent for the signing of a mining convention, should be on the table for signature any time between now and March 2008 ending.
The information being gleaned from other sources is that the signing of that letter of intent could take place on January 15, 2008. This in the hope that the Mbalam project is not delayed; after all, it’s the first time Cameroon is getting into this sector, with the Republic of Guinea (a serious competitor) threatening to increase its production to well over 70 million tons per annum. The deposits of this country are said to surpass those of Cameroon largely. Put differently, Cameroon has every reason to hasten up the project at Mbalam.
However, according to Cameroon’s legislation, the letter of intent is an important document. It precedes all of such investments. Through it, the partners involved must come to an agreement over a number of issues, following which an establishment convention is signed. This is the last and indispensable step toward any financial and technological investment.
Cameroon Radio Television (CRTV) Gemnda Buinda
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