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Cameroon: China’s Sinosteel Strikes Deal Over Kribi Iron Mine

Sinosteel
Sinosteel

The State of Cameroon, represented by the Minister of Mines, Gabriel Dodo Ndoké, and the company Sinosteel Cam SA, a subsidiary of the Chinese mining giant Sinosteel Corporation, signed on May 6, 2022 in Yaounde, the mining convention relating to the exploitation of the iron deposit of Lobé in Kribi, in the southern region.

 

According to this convention, which defines the rights and obligations of the parties, the exploitation of this reserve of 632 million tonnes of iron with an average grade of 33%, should provide the State of Cameroon with annual revenues of 22.9 billion CFA francs, of which 4.9 billion CFA francs are destined for local communities.

The projected envelope, which does not take into account “common law taxes and dividends in respect of the 10% of free shares of the State” in the operating company (provision of the Mining Code of 2016), is mainly made up of revenues from the ad valorem tax, FCFA 14 billion, including FCFA 3.5 billion for local communities.

It also includes FCFA 4.7 billion per year from the export tax, FCFA 2.8 billion from the 1% of production accruing to the state under the production sharing contract, and FCFA 1.4 billion to replenish the special local capacity development account for communities, which was established by the 2016 Mining Code.

In order to be able to provide such revenues to the State of Cameroon, thanks to this iron deposit that can be exploited for more than 50 years, it is learnt, the company Sinosteel Cam SA intends to ensure an annual production of 10 million tonnes of iron with an average grade of 33%.

The enrichment of the ore should also allow for the annual production of 4 million tonnes of iron with a grade of more than 60%, it is learnt. According to official estimates, the Lobé mining project in Kribi should generate 600 direct jobs and about 1,000 indirect jobs.

A hope for local industry

Faced with the delay in the exploitation of the Mbalam iron deposit (East region), split between Cameroon and Congo, or the lack of dynamism around the exploitation of the Nkout deposit (South region), the effective exploitation of the Lobé iron deposit in Kribi should boost the Cameroonian iron and steel industry, which has been booming for several years. Indeed, despite significant investments made over the past 10 years, local metallurgists and steelmakers still depend on imports of billets (molten iron waste in the form of ingots and used for the production of concrete iron, editor’s note) for about 70% of their production, due to the scarcity of scrap iron on the local market.



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