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China’s Sinosteel Wins First ever Iron Ore Mining Licence in Cameroon

Sinosteel _Lobe Kribi ore

President Paul Biya has paved the way for the operationalisation of the very first industrial mining project in Cameroon.

This contract has been Negotiated for nearly seven years, between 18 November 2015 and 6 May 2022 , the signing of this mining convention had caused a great deal of controversy in the country, reports Investir au Cameroun. The benefits of the project for Cameroon had been deemed minimal and many analyses had flourished, accusing the government of having sold the iron deposit of Lobé in Kribi to the Chinese Sinosteel.

IAC also quotes “On the basis of the law, which indicates that the exploitation permit must be granted as soon as the convention is signed, but above all on the basis of the truth, the president of the Republic signed the permit, despite the controversy. We are currently in the phase that consists of taking possession of the permit, which covers an area of 138 km2″, says a source close to the case. However, it must be said that the decree granting the exploitation permit to Sinosteel has not yet been made public as is customary with other decrees.

Licence

This phase consists of actions such as the demarcation of the land, the installation of plaques indicating the new owner of the site, obtaining the declaration of public utility, the establishment of the evaluation commission of the property impacted by the project for the purpose of compensating the owners and the signing of an emphyteutic lease with the State of Cameroon.

As a reminder, according to the mining convention, which defines the rights and obligations of the parties on this project, the exploitation of the Lobé iron deposit in Kribi, with a potential of 632 million tons of iron with an average grade of 33%, should provide the State of Cameroon with annual revenues of 22.9 billion CFA francs, including 4.9 billion CFA francs for local communities.

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

There is also 4.7 billion FCFA per year in export tax, 2.8 billion FCFA in the 1% of production that goes to the state under the production sharing contract, and 1.4 billion FCFA to replenish the special local capacity development account for communities, 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.



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