Special Issue on Projects Infrastructure Mining Energy Agriculture

Major projects Agriculture Energy business in Mining Industry Services Finance 2012 - SI 01 2012 cameroon

Special issue on projects Infrastructure Mining Energy Agriculture

business in cameroon Contents 4 •Four ongoing giant projects 16 •Cameroon: Abounding to boost the in all forms of energy economy

Business in Cameroon

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2012 / SI 01 -3- business in cameroon Infrastructure

Four ongoing giant projects to boost the economy

Several giant projects are being implemented in Cameroon. Among these projects, three are in the energy sector: Lom pangar in the East, Memve’ele and Mekin dam projects in the South of the country. The last one is in the transport sector: Kribi deep seaport located in the Southern part of Came- roon. “Without energy, there cannot be any development. There will be no industries, transformation of our primary products President Paul Biya laying the foundation stone of the Memve’ele hydroelectric power and minerals. Without energy, we would plant on June 15, 2012. not talk of a modern economy”, P r e s - ident Paul Biya said on June 15, 2012 transmission line of 225 Kva (kilo volts tral African States Development Bank while laying the foundation stone of the amperes) that would serve as a bridge (BDEAC) are some of the country’s par- Memve’ele hydroelectric power plant. between the dam power station and tners in the project. As per the project Yaounde for a distance of about 300 Km. factsheet, Eximbank has already availed Memve’ele dam project Work is being executed by Chinese engi- CFAF 243 billion as expected. The pro- Estimated at CFAF 420 billion, the neers from Sinohydro Corporation Ltd ject is financed through build-operate- Memve’ele dam project, upon comple- while Egis Cameroun is supervising the transfer (BOT). tion in late 2016 or early 2017, would work. The project is expected to create pump about 201 megawatts into the na- at least 3,000 direct jobs. Lom Pangar tional grid. It would comprise of a dam, Lom Pangar project is relatively more a mill, and a transformation station. The Chinese Eximbank, the African Deve- advanced and the Chinese constructor, latter would be built in Ebolowa with a lopment Bank (AfDB) and the Cen- China International Water and Elec- tric Corporation (CWE), is expected Cameroon a country underconstruction. to complete work in 38 months so that the dam can go online in July 2014, said Electricity Development Corpora- tion (EDC) general manager, Theodore Nsangou.

Coyne & Bellier/ISL Group is supervising the execution of the project, supervising work on the site, and assisting the executing authority during and after the project, as well as building the capacities of the personnel of EDC accordingly. They would earn CFAF 9.8 billion for the job according to the contract. The project consists in building a six billion-cubic metre water reservoir, an electricity plant of 30 megawatts (for rural electrification schemes in the East region) and a high tension line of 90 ki- lovolts. With this, 170 megawatts of ad-

-4- 2012 / SI 01 Infrastructure business in cameroon

Kribi deep seaport currently under construction by the China Harbor Engineering Company. ditional energy will be produced and the minium smelter. As the largest electrici- the first phase of the project which took project will help sustain other project ty consumer in Cameroon, Alucam has off in December 2010, will ease the along the Sanaga River like the Nachtigal vowed to triple its output if Lom Pan- evacuation of minerals notably Bau- dam (to produce about 280 megawatts) gar were to provide them with enough xite, Iron, Cobalt and Nickel. Also, the and Song Mbengue dam (expected to power. port will have an off-shore container produce about 900 megawatts). terminal that will eventually encourage Mekin dam transshipment. Lom Pangar in its entirety would cost As concerns the Mekin hydroelectric Upon completion, the main port of five CFAF 247 billion according to EDC dam, 40% of the work has been com- to 16 metres depth will receive big vessels officials. The Lom Pangar Hydropower pleted in July 2012 according to govern- with a capacity close to 100,000 tonnes. Project is a multi-donor partnership. ment sources. This will fill the gaps of the Douala Sea- The World Bank is part of an interna- port which is only six to seven meters tional partnership that is supporting the Authorities are hopeful that these scores in depth and can at best receive vessels venture to help bring badly needed elec- of energy projects would reverse the with a capacity of 15,000 tonnes. tricity to Cameroon. International par- energy deficit plaguing the country at The second and third phases of the project are expected to be financed by pri- All those projects will lead Cameroon to an vate companies on the “Build-Operate- Transfer (BOT)” system. emerging economy by 2035 with a double Of the CFAF 200 billion raised in trea- digit economic growth. sury bonds, CFAF 21 billion were allocated to this project. China had disbursed a loan of CFAF 207.7 billion through tners in the project include the African the moment, thereby laying the founda- Eximbank. Counterpart funding to the Development Bank (AfDB), the French tion for emergence. tune of CFAF 36 billion to meet the en- Development Agency (AFD), the Cen- tire budget of the first phase evaluated at tral African States Development Bank Kribi deep seaport over CFAF 240 billion had equally been (BDEAC), and the European Invest- As for the Kribi deep seaport in the mobilised. ment Bank. South region, it is expected to go ope- Financing from BDEAC and the AfDB rational by 2014. This important project All those projects, upon achievement for Lom Pangar were both signed in will not only serve Cameroon but the will lead Cameroon to an emerging eco- January 2012. whole of the Central African sub region. nomy by 2035 with a double digit eco- One of the main beneficiaries from this Presently under construction by the nomic growth. megaproject would be Alucam, the alu- China Harbor Engineering Company, John MacIntosh

2012 / SI 01 -5- business in cameroon Infrastructure

CFAF 15 trillion to implement Cameroon’s railway plan

Cameroon has developed a new railway Gross Domestic Product (GDP) of ment intends to start implementing the master plan that will connect the country about 4.75% per year until 2040, ac- rail plan this year through 2020. with neighbouring states and also help cording to the Ministry of Economy. reduce the relative isolation of agricultu- “Similarly, the volume of imports of raw The following lines are scheduled for the ral and mining production areas. and secondary materials will be reduced first phase: Edea/Kribi (136 km, CFAF in favour of an increase in the volume of 468.7 billion), Mbalam/Kribi (602.6 km, With the proliferation of major projects, particularly in the field of mining (iron in the South and bauxite in Ada- mawa) coupled with the construction of the Kribi deep seaport, Cameroon wants to expand its rail network, currently stands at 1000 km. The first draft of the national railway master plan was

The new national railways will result in a steady GDP increase of an estimated 4.75% per year until 2040 presented to the press on April 28, 2011 by the then Minister of Planning, Louis Paul Motaze.

This national rail network will run along several cities. In addition to trans- porting mineral resources for export, it seeks to improve the sub-regional traffic. According to the Ministry of Eco- nomy sources, it will link major ports in mining areas, thus helping the Came- roon industry to emerge while boosting exports in the region. The cities to be serviced by the rail exports in the Central Africa sub-region,” CFAF 310.9 billion), Douala/Limbe (73.5 network, is the Kousseri-Kribi section the ministry added. The project could km, CFAF 341 billion), and Ngaoundéré/ through Ngaoundere, Bertoua, Obala, generate 348,300 short-term jobs and Douala (907.5 km, CFAF 4,545 billion). Yaoundé, and Mbalmayo. Linear lines 256,000 medium-term jobs. from Mbalam-Kribi and Limbe-Mba- The new version of the national railway The railway will have 50 kg rails. The speed lam. Several other sections such as Ba- plan presented by the General Directorate will be between 150 km/h and 170 km/h touri-Limbe are also earmarked. for Economic and Public Investments for passenger trains and between 70 km/h Programming indicates that the total and 90 km/h for freight trains. The Natio- Benefits project cost is estimated at CFAF 14,977 nal Railway Master Plan was completed in Starting 2015, this new national plan trillion (€ 23 billion). Funding is currently partnership with a Korean company. will result in a steady increase of the being sought. The Cameroonian govern- B-O.D., JV.

-6- 2012 / SI 01 Infrastructure business in cameroon

Limbe deep seaport: CFAF 426 billion to be mobilized The South-West population has for many years been waiting for this project to take-off.

After the Kribi deep seaport, Cameroon The project cost is estimated at 426 bil- zation between Limbé and the Cameroo- will work towards another deep seaport, lion CFA francs (€ 650 million)-funds nian economic city of Douala.” Limbe. that the Cameroonian government is Feasibility studies were concluded in still trying to mobilize. The South-West population has for 2009. They were carried out by the Mefiro Oumarou, already asserted in many years been waiting for this project Limbe Port Development Corporation (LPDC), a company incorporated in Cameroon but funded by the Republic Traffic at the Limbe deep seaport is of Korea. It will be built in the South- West region, west of the Atlantic. It will projected to reach 200,000 containers per consist of four terminals that will re- year during the initial phase. ceive containers depending on their size. The four sites are meant for both commercial and industrial activities, coastal shipping, container terminal and the oil 2009 in the newspaper Entrepreneur to take-off, as some 20,000 jobs have been terminal. that “the construction of the deepwater announced with all the ripple effects it Traffic at the Limbe deep seaport is pro- port of Limbe, which integrates into the can have on consumption and services. jected to reach 200,000 containers per global vision of development of harbor fa- Limbe is just 71 km away from the eco- year during the initial phase. By 2050, it is cilities, constitutes an added value for the nomic capital of Cameroon, Douala. expected to soar to 1.6 million containers. state economy with a plan of industriali- BOD

2012 / SI 01 -7- business in cameroon INFRASTRUCTURE

CFAF 15.3 billion to renovate Douala airport

Douala airport attracts the bulk of the to end its contract with Air CEMAC, it a modern look by refurbishing parts traffic in Cameroon and Central Africa. because Brazzaville in Congo was selec- of it. More specifically, ADC consi- It is the major hub for all airlines doing ted as headquarters of the sub-regional ders revamping the air conditioning business with Cameroon. “All passengers company instead of Douala as proposed system, constructing private lounges, land here, before jetting off to Europe. by the South African company. automated car parks and partially Others arrive first in Douala from Europe, However, despite periodic renova- rehabilitating the aircraft parking lot, before taking off to their destinations, tions, Douala airport is not yet fully among others. mainly countries in the sub-region,” said secured and in keeping with interna- the Minister Delegate for Transport, tional standards. That is why Aéro- Public-private partnership Mefiro Oumarou. The same argument ports du Cameroun SA (ADC) and the According to the Ministry of the Eco- was used by South African Airways Cameroonian government plan to give nomy, part of the funding has already been secured - 5.3 billion CFA francs (€ 8 million) from the World Bank. The Douala International Airport total amount of the project is 15.3 bil- • Status: International Airport lion CFA francs (€ 23 million). The Mi- • Manager: les Aéroports du Cameroun SA (ADC) nistry of the Economy said that the In- • Capacity: 1.5 million passengers and 50 000 tons of freight per year ternational Finance Corporation (IFC) • Parking spaces: 12 had submitted a request for the imple- • Capacity operated: 31% mentation of a public-private partner- • Distance city / airport: 5 km ship for Douala and Yaoundé Airports. • Weather: heavy rains from March to November, temperature 26, 9° C According to the Ministries of Trans- • Regions served: Littoral and Southwest port and Economy, the search for addi- • Population: 3,348,948 people tional funding is still on. This project, • Main export products: Tea, coffee, green beans, pineapple, carrots, tomatoes which started in 2011, should normally • Main products Import: electronic appliances, medicines, textiles be completed in 2013. • Accommodation capacity: 4,706 beds Once it materializes, the international airport of Douala could be listed among Source: Civil Aviation Authority in Cameroon. the model airports of Africa. ALB

-8- 2012 / SI 01 INFRASTRUCTURE business in cameroon

“Sawa Beach”, a tropical Venice in Douala In 2004, the former Government presidential race, Edouard Etonde Douala to clear all obstacles blocking Delegate to the Douala City Council, Ekoto presented this project to Paul the realization of the project and Edward Etonde Ekoto dreamt and ini- Biya in these words: “This is a par requested the Douala City Council tiated the “Sawa Beach” titanic project excellence project in Douala (Paul to reactivate it. made up of business center hotels, a Biya). It will settle the main problems convention center, a cultural center, an of jobs, housing and offices, gardens, Although the technical studies are not administrative area, a marina, a swim- parks and leisure areas.” yet fully completed, parts of the stu- ming arena, parks and public gardens, dies have been available since 2003. an amusement park, commercial The project was put on hold in 2006. space, and 10,000 social houses, all Today, the Cameroonian govern- The total project cost is estimated at built on 1,000 hectares between the ment wants to revive it. In February 550 billion CFA francs (€ 840 mil- seaport and the airport. 2012, on the instruction of Prime lion) according to the Ministry of the Minister Philemon Yang, Minister of Economy and investments are being During the election campaign in Housing and Urban Development, invited. Douala, ahead of the October 2004 Jean Claude Mbwentchou went to Mamadou Cissé

143 km road to link Chad, Nigeria, and Cameroon This is a road linking the Federal Republic of Nigeria to the maintaining Adoum Gargoum in the government (both sons Republic of Chad through Cameroon. Dubbed “tarring the of the region), indigenous people did not fail to remind autho- road Maltam-Fotokol and Bodo-Makary-Hilealifa-Karena- rities about the need to rehabilitate the Maroua-Kousseri and Katekime stretch,” it consists of 73 km from Nigeria to Came- Maltam- Fotokol routes-a priority to them. roon and 70 km to Chad. This project will open up the Lake Chad area, strengthen sub- Maltam-Fotokol is located in the Logone and Chari, in Ex- regional integration (Chad-Cameroon-Nigeria) and facilitate treme North Region of Cameroon. The Logone River creates the movement of people and goods in the sub-region. the natural border between Cameroon and Chad. This road is the most important request of the people of this area. Technical studies are 80 percent through, says the Ministry of In March 2012, during a “thank you” rally to Paul Biya for Public Works. The total cost of funding being sought is esti- appointing Alamine Ousmane Mey, Minister of Finance and mated at 72.6 billion CFA francs (€ 110 million). ALB

2012 / SI 01 -9- business in cameroon INFRASTRUCTURE

Cameroon’s project of 10,000 social houses in gestation

In major cities in Cameroon, the problem of accommodation is cru- cial. Social houses are inadequate, rare and expensive. “There are no social houses in Cameroon. What is being referred to as ‘social houses’ is unaffordable to the average Came- roonian. Only top government officials live in SIC houses because the cost is high and they are also rare to find,” Sylvain Samba, a young student, explained.

According to the Ministry of Hou- sing and Urban Development, at present, it is estimated that over a million houses are needed to fill the gap, and with an annual growth rate of 10% the government decided to

At present, it is estimated that over a million

houses are at the desired pace, in consultation cost is estimated at 907.1 billion needed to fill with all the institutional sectors in- CFA francs (€ 1.38 billion). volved,” observed the President of the gap. the Republic, Paul Biya, addressing Measures taken supporters of his party on Septem- Measures taken by the government ber 15, 2011. “I have therefore ins- at the institutional level to offer launch in 2010 a program to build tructed the Prime Minister to reacti- solid housing to its citizens, include 10,000 social houses and develop vate it as soon as possible,” he said. the restructuring of SIC (State-ow- over 50,000 building plots. ned real estate company), MAE- Minister Jean-Claude Mbewntchou TUR (real estate developer) and The program aims to build 10,000 of Housing and Urban Develop- MIPROMALO (a structure created social houses in the cities of Yaoun- ment pointed out that “the govern- by government to promote the use dé and Douala, as well as the ad- ment of Cameroon has a firm com- of local materials in building), “and ministrative headquarters of the mitment to implement this program especially redefining the role of Cre- regions, divisions and university with the aim of providing decent dit Foncier Cameroon in real estate towns like Dschang. This project is housing to the population thereby banking.” funded by la Société immobilière du reducing the housing deficit.” Cameroun (SIC), la Mission d’amé- “Legally, the institution of texts on nagement et d’équipement des ter- Funding is still being sought, accor- real estate and condominium is, also rains urbains et ruraux (MAETUR) ding to the Ministry of the Econo- in the pipeline. Texts will also be and Crédit foncier du Cameroun my, Planning and Regional Deve- introduced on housing cooperatives (CFC), with the support of foreign lopment, in the amount of about which will provide a solution to the partners. “Given the extent of needs, 725.7 billion CFA francs from concerns of the most disadvantaged,” I think the program is not advancing foreign partners. The total project says Jean-Claude Mbewntchou. MC

-10- 2012 / SI 01 INFRASTRUCTURE business in cameroon

Two interchanges to be built in Yaoundé

roundabout during rush hour. “The Yaoundé breathes, Cameroon is alive”. secret is to get out early in the morning. This is why government is planning to Otherwise, you will always be late because build two interchanges at these roun- of traffic jam,” a taxi driver advised a dabouts in these areas. The Ministry of worried passenger. The roundabout was the Economy, Planning, and Regional redesigned a year ago. But so far, traffic Development declared that the feasibi- is not always very fluid. The situation is lity studies of these projects are almost similar to that of the Tropicana rounda- completed. bout at the south entrance of the city. Some 41.7 billion CFA francs (€ 63 mil- The pleasure of rush hours. The former Minister, Clobert Tcha- lion) are needed for these projects and tat, said “Yaoundé will breathe better” the Cameroon government is still loo- It is a traffic nightmare for Yaoundé resi- and the “Cameroon will live better”. I t king for partners to fund the projects. dents to cross the “carrefour Trois statues” was inspired by Paul Biya’s: “As long as BOD

24 billion CFAF to build the bridge over Sanaga in Natchigal It’s a real ordeal for the populations of wrote at that time by the paper ‘La Voix Ntui, a rich agricultural locality situated du Paysan’, which sounded the alarm. in the Central region of Cameroon. To When the ferry is operational, one transport their farm products to the ci- boards it almost trembling with fear. In ties, they have to cross the Sanaga River November 2010 for example, the ferry civil servant, he told ‘La voix du Paysan’ by ferry. The same applies to the cattle, which connects Nachtigal village to the that he cannot go to Yaoundé with his which are also transported by ferry or city of Ntui, with close to 200 passen- car anymore because the trip will be too by boat. An average of CFAF 5,000 per gers and seven vehicles on board diver- expensive. “When will there be a final head is paid to carry them across by ted 10 km away from the landing point, solution to this problem? Is it forbidden to boat. In addition, the ferry-boarding fee near Ntui. build us a bridge like that of Ebebda?” he has to be paid and this contributes to Fortunately, there were no human ca- wondered. increasing the price of foodstuffs, accor- sualties. ding to farmers. In response, officials of the Ministry of Long wait the Economy, Planning and Territorial Worse still, when the ferry breaks down, Actually, Ntui is linked to Yaoundé, the Development say that the technical stu- the food rots and patients die in vil- capital, by three exits. However, the dies for the construction of the bridge lages because they have no means of shortest and most used exit goes via over the Sanaga in Natchigal have been being evacuated to Yaoundé, the capital. Obala. It covers about 80 km. Travelling available since September 2010. Cocoa producers are deducted 10 CFAF through this exit, one has to necessarily per kilogramme of cocoa sold to touts cross River Sanaga by ferry. The river is It involves building a 850 m bridge over (buyers). This amount is said to cushion situated 12 km from the city of Ntui. Ac- River Sanaga in Natchigal which links extra costs generated by the breakdown cording to ‘La Voix du paysan’, it is also the localities of Batchenga and Ntui. of the ferry, which lengthens transporta- the shortcut for cattle transported from The overall cost of the project is estima- tion to Yaoundé. The same situation was the ‘Grand Nord’ of Cameroon. ted at CFAF 24 billion (€ 40 million). experienced very recently in March 2012 The populations have been expecting when the populations of Ntui spent se- the construction of the bridge on this Financing which still needs to be sought. ven months without a ferry due to its route for over three decades. Mr Ayissi It is a project which can be delivered wi- breakdown. “7 months with no ferry on introduced as head of Ehongo village thin three years and the Cameroonian the Sanaga, a disaster for the Mbam and near River Sanaga said he was disgusted government would like the bridge to be Kim economy”, was the title of an article to talk about this problem. A retired operational in 2015. MC

2012 / SI 01 -11- business in cameroon Infrastructure

A Ring Road to open up a rich agricultural region Menchum falls.

The construction of the Ring Road has been among the huge expectations of the North-West since 1983. President Paul Biya told cheering crowds that he will “personally supervise” the tarring of the Ring Road.

According to the Ministry of the Economy and that of Transport it is a heavy task to find partners capable of mobilizing 143 billion CFA francs (€ 220 million) to carry this project to completion. As of now, part

The Menchum falls and the majestic rocks in Ndop have been left unexploited. 215 km stretch to boost of the road is under construction; the 61 km stretch from Ndop to Kumbo is under construction. Sogea Satom Cameroon is carrying out the work at the cost of 22 bil- trade with Central Africa lion CFA francs.

Winding across valleys and over hilltops, Republic the Ring Road is seen as the key to unloc- king the economic potential of the region, Bus Saviem: it is the kind of vehicle that It will open up Kadey, Lom and Djerem whose people are among the most dyna- you encounter on the Bertoua-Batouri divisions in the East region, thereby lin- mic in the country. road. Drivers will tell you that this bus king the region to the rest of the country can easily adapt to the almost unusable and facilitating the movement of goods The road leads to the country’s largest tea state of the road. and persons. This region has a high agri- farm and factory in the chilly Ndu sub- cultural potential. This road would also division and a vast palm oil production The road Bertoua - Batouri – Kenzou increase trade with Equatorial Guinea. basin in the warm Mboh plain. (Cameroon) – Republic of Central Africa border, 215 km long, will link The project cost is estimated at 70 bil- Also the country’s largest cattle produ- Bertoua, the regional capital of the East lion CFA francs (€ 110 million). Tech- cers after the Adamawa, a dairy and beef and Kenzou, a border town within the nical studies of the first to lots are avai- processing industry have failed to develop Republic of Central Africa. The project lable at the Ministry of Public Works, because of transportation difficulties. And consists of three lots: Bertoua-Akokan but funding is still being sought. The touristic potentials like the Menchum falls (46.3 km) Akokan-Batouri (49.1 km) estimated duration for completion is and the majestic rocks in Ndop have been and Batouri - Kenzou RCA-border 72 month according to the studies avai- left unexploited. BOD (120 km). lable. MC

-12- 2012 / SI 01 Infrastructure business in cameroon

Kribi- 79.6 billion Campo CFAF to link road seeks Cameroon- funds Congo

The Mintom-Congo border road This Mintom - Congo border road is of dual importance for Came- is 132 km long. It includes two lots roon and the Central African sub- which may be reduced to one, ac- region. At national level, its com- cording to the Ministries of Public

The inhabitants of the South region ea- gerly await the construction of this road as it would put an end to their struggle to evacuate their farm products from the countryside to the cities. Campo is the last town on the Cameroon-Equa- torial Guinea border.

The 75 km long Kribi-Campo road is impassable in the rainy season, and is equally difficult in the dry season. Once completed, this road will link Kribi, headquarters of the Ocean division and the marine terminal of Campo. Forest, agriculture and aquacultural products from Campo will easily reach markets in Cameroon and neighboring countries.

With the construction of the Kribi deep pletion would improve traffic on Works and of the Economy, Planning seaport, the Kribi-Campo road would this part of the priority network and Regional Development. These offer multiple trade opportunities with and facilitate the transportation are Mintom - Lele (62 km) and Lele Gabon and Equatorial Guinea. of food stuffs in this region which - Congo border (71 km). Feasibility has a high agricultural poten- studies for the project are available at Estimated at 26.5 billion CFA francs tial. At the international level, the Ministry of Public Works. (€ 40 million), funding is still sought, ac- the Mintom-Congo border road The road is estimated at 79.6 billion cording to the Ministry of Public works. will strengthen the sub-regional CFA francs (€ 121 million). Fun- Once funding is available, a call for ten- integration, particularly between ding is still being sought, according ders will be launched for the selection of Yaoundé and Brazzaville through to a statement on the website of the the companies to construct the road and Mbalmayo, and thus develop Ministry of the Economy. Once fun- supervise the execution of works. trade between the two countries ding is available, the project could be Ayissi Le Beau further. completed in 48 months. BOD

2012 / SI 01 -13-

business in cameroon ENERGY

Cameroon: Abounding in all forms of energy

Cameroon possesses Africa’s grea- close to three decades, few energy can be no real development, there test hydroelectric potential after the projects were implemented. “This can be no industry, and there can Democratic Republic of Congo. Its is where the problem lies in Came- be no transformation of our agri- potential is 55.2 gigawatts (GW), of roon,” according to Jacques Nou- cultural raw materials or minerals which only 3% has been harnessed. tang Betchem, senior research and our economy into a modern “We have the largest natural gas assistant for studies and forecas- one.” And “this energy deficit hea- deposits in Africa. We also have great ting in the Ministry of Water and vily penalizes the industry and other hydroelectric potential. The economy Energy. “The country has an energy sectors”, he admits. Already in 2007, here is going to take off with energy, deficit that prevents it from enga- he stated that “it is important that electricity and oil, and these areas ging in certain projects.” Without this problem be dealt with as soon as are open to partnerships with inves- energy, development efforts are possible.” Hence, the desire of Ca- tors,” the former Minister of Mines, forestalled. According to the Mi- meroon today is to turn this dark Water Resources, and Energy Henry nister of Water and Energy, Basil page of its history and develop its Kibuh Tume stated. Atangana Kouna, today the energy energy infrastructure in collabora- gap in the interconnected grid that tion with foreign partners. For a very long period, Cameroon, serves the southern part of Came- With Lom Panger, Memve’ele and while under the structural adjust- roon, for example ,stands at 150 Mekin hydro dams under construc- ment program, could not invest MW in 2012. Without energy, says tion as well as the Kribi gas plant, in energy projects. As a result, for the Head of State, Paul Biya, “there the total energy output is projected

-16- 2012 / SI 01 ENERGY business in cameroon

to reach 1,500 megawatts by 2016, SEL, the Cameroon’s has a signifi- power and heat generations and to according to Minister Kouna. cant and economically exploitable involve private capital in the deli- wind potential in its western re- very of energy. Natural gas deposits gions and in Adamawa. At the moment, several investors are Cameroon has immense untapped Projects in the various energy sec- already in Cameroon to harness this reserves of natural gas. According tors are now available and Came- solar energy potential. This year, to the agency in charge of regu- roon is looking for partners for the Ministry of Water and Energy lating the energy sector in Came- signed a contract with the Chinese roon (ARSEL), the proven reserves company Huawei to install public are estimated at 180 billion cubic The desire of solar lights from Yaounde to Soa, a metres or close to 6 Tcf, while the university town on the outskirts of harnessed potential is presently nil. Cameroon today is to the capital. Also during the Sino- turn this dark page African summit this year, Came- Solar and wind roon signed an MOU with China With regard to solar energy, Came- of its history and for the electrification of 1,000 vil- roon has an abundant potential develop its energy lages through solar power plants. In especially in its northern part. The the same vein, the Ministry of Ener- average irradiation in the northern infrastructure in gy recently signed another with part of the country is 5.8 kWh/m2/ Fides Gestion, a French company day and 4 kWh/m2/day in the sou- collaboration with for the construction of a 550 MW thern part of the country, states foreign partners. photovoltaic power plant. In the ARSEL. To the regulator, there is an years ahead, Cameroon will have average irradiation of 4.9 kWh/m2/ sufficient energy to meet the popu- day across the country. But at pre- their take-off. Ministry sources, lation’s increasing energy demand sent this potential remains under- say a renewable energy policy is and sell to other countries if there utilized. being prepared with the aim of is a surplus. According to recent studies by AR- increasing the share of renewable Beaugas-Orain Djoyum and Jude Viban

2012 / SI 01 -17- business in cameroon ENERGY

Noun-Wouri dam: A ripe opportunity

Noun River. per second”. African Energy Compa- ny SA believes that several alterna- tives will be analyzed in the feasibility study in order to minimize costs and optimize production. “An alter- native would be to equip the plant with 10 turbines of 250 MW each. Based on these characteristics, the

The Noun-Wouri hydroelectric a huge market. According to the dam project has a huge potential. African Energy Company Ltd. Wouri River. “Noun-Wouri is the confluence of (AEC), which conducted the study two watersheds: the Noun and the on this project, “Nigeria currently average annual volume of water that Wouri. Here, the falls are very favo- generates only 3,500 MW while it could be used would be 80%. The an- rable for exploitation,” said Jacques needs 100,000 MW to become an nual production can be estimated at Noutang Betchem, Senior Research industrialized economy. According 21,900 GWh. This production can be Officer at the service for studies and to the World Bank, one of the biggest significantly enhanced by improving forecasting in the Ministry of Wa- obstacles to the development of the the performance, from 80% to 95%. ter and Energy. According to him, investors seem interested in this project, but nobody is truly com- This project would not only be beneficial mitted. Funding necessary to realize this project is estimated at CFAF 2.5 to Cameroon. Cameroon’s neighboring trillion (€ 3.8 billion). countries, Nigeria in particular, constitute “Some companies have signed MOUs a huge market. with the government. This is not the first time that these MOUs are signed. Government has already carried private sector in Nigeria is energy. The feasibility study should answer out studies but partners must update Also, many companies (commercial, the question of optimization. (...) In them before constructing the dam,” residential, industrial) have resolved terms of returns, annual power would said Jacques Noutang Betchem. to use generators to meet their electri- be 20,000 MW, 80% guarantee, or The project would be carried out city needs, which increases cost both 17.52 million MWh sales,” says AEC. in two phases: the construction for themselves and for the national Beaugas-Orain Djoyum and Jude of a dam and reservoir, and the economy.” Viban construction of a hydroelectric plant. The role of the dam is to “10 turbines of 250 MW Features the Noun-Wouri hydroelectric reserve water to enable waterfalls each” dam project : to drive the turbines, and then pro- According to AEC, the main fea- Tank Height 600 m duce electricity. tures of hydroelectric development This project would not only be which will be constructed on the Reservoir area 154,000 ha beneficial to Cameroon. Came- River Noun-Wouri are “average tur- roon’s neighboring countries, bines under 606: 119 m per second Power Station 2,500 MW Nigeria in particular, constitute and a maximum flow of 606: 240 m Annual production 21,900 GW

-18- 2012 / SI 01 ENERGY business in cameroon

Njock Dam seeks investors

regions: Centre, South, Littoral, West, in progress and funding is being sought. Southwest and Northwest. Cameroon needs to mobilize CFAF 180 billion to achieve the culmination of this € 270 million (CFAF 180 billion) project. According to the studies already The dam is estimated to generate 200 available, the project can be completed MW of power. According to the Mi- in 48 months. nistry of Planning, technical studies are Ayissi Le Beau CFAF 85 billion to construct Nyong River.

The construction of this dam will strengthen the south interconnected Warak Bini dam network i.e. le Réseau Interconnecté This is one of the most important pro- Sud, RIS, increase access to electricity jects in the Ministry of Water and Ener- for the local population and ensure the gy (MINEE) intended to improve ener- development of all sectors of the econo- gy supply in Cameroon. The proposed my. The Njock hydroelectric dam pro- hydroelectric dam on the Bini and ject is located near Eséka in the Centre Region. The 75 km Nyong river, flows The Warack from an altitude of 620 m to 150 m. Bini Dam will Nyong basin By its size (27,900 km2), the Nyong basin allow export of is the second-largest river basin in Ca- electricity from meroon, after that of Sanaga (140,000 km2). Studies by the Research Institute Cameroon to Chad for Development (IRD) shows that and Nigeria. the Nyong has its source near Abong- Theodore Nsangou, Director General of the Mbang at an altitude of about 700 m. Electricity Development Corporation. The river passes through a series of ra- Warack rivers in the Adamawa region is part of the 2012 ministerial roadmap. million (CFAF 85 billion) including This year, the government plans to “fi- the distribution line. According to the Cameroon needs nalize supplementary studies and to start Ministry of Economy, Planning and Re- to mobilize considering developers for this project”, gional Development, financial partners the roadmap states. The budget for this for the execution of this project are still CFAF 180 billion work is included in this year’s MINEE being sought. budget. Geotechnical and hydrologi- to achieve the cal studies are due to be completed in Export to Chad, Nigeria culmination of November 2012. A partial report on the According to the Director General of the studies is already available. Feasibility Electricity Development Corporation, this project. studies were contracted to a U.S. firm, Theodore Nsangou, whose corpora- Delphos International Ltd since 2009. tion is working on this project with the Ministry of Water and Energy, the dam pid falls, the most important of which Financial partners will prevent energy deficit in northern are those of Mpoume near Makak and Hydroelectric development in the Bini Cameroon. MINEE said, the project will Njock near Eseka. The total length of Warack involves the construction of a strengthen the Northern Interconnec- its course is 670 km while the longest of hydroelectric dam with a capacity of 75 ted Grid (RIN) and allow the export of its basins is 400 km. The Njock hydroe- MW and an energy distribution line. As electricity from Cameroon to Chad and lectric project on river Nyong covers six of now the project is estimated at € 130 Nigeria. BOD, J.V.

2012 / SI 01 -19- business in cameroon Energy Dong Song holds CFAF 40 280 MW billion to In Cameroon, the Sanaga River is the largest Sanaga River. export river with a catchment area of 14,000 km². It is on this river that the hydroelectric dam of Dong Song with a capacity of 280 MW is being earmarked. electricity to According to Ernest Nnanga, an engineer and senior statistician at the agency in charge of giant projects in the Ministry of Nigeria Economy, Planning and Regional Develop- ment, the objective of the project is to boost electrical energy and reduce its cost at the level of households and industries. This is a project that will receive an additional supply of water from the Lom Pangar reservoir (the foundation stone was laid in August) as Dong Song is downstream of Lom Pangar which has a 6 billion m3 storage capacity of water. With its drop in height from 24 m, it is expected, according to Electricity Development Corporation (EDC), that Dong Song will have an additional 274 GW/h because of the water from Lom Pangar. The project is estimated at CFAF 184.2 billion (€ 280 million). The funding is not yet available. Technical Studies are still in progress, but the duration of the project is estimated at 96 months. JV

Cameroon wants to export its energy CFAF 13.3 billion for to Nigeria. Once the ongoing hydroelectric dam projects are completed, Cameroon would have enough energy the construction of and is already thinking of exporting its surplus energy. But before we get there, we need to develop the transport infrastructure and distribution of electrical mini hydropower energy in the localities of Adamawa and the North, the frontier with Nigeria, government sources said. This is one of the plants components of the Cameroon-Nigeria electricity interconnection project from In the rural electrification project, Ca- for the local population to maintain the Garoua-Yola. meroon intends to build hydropower project and the creation of small busi- According to the General Directorate plants in 25 localities thereby empowe- nesses related to hydroelectric energy for Economy and Public Investment ring people in villages technology. Programming, the project will also elec- who, because of lack of Technical studies are trify the border communities of the two electricity, have no access already available at the countries with an increase in the rate of to modern energy services Ministry of Water and access to electricity and improve social such as lighting, audio- Energy. The total pro- conditions of the population while en- visual and quality health ject cost is estimated at suring the development of all sectors of care The Ministry of CFAF 13.3 billion (€ 20 the economy. Economy, Planning and million). The Cameroon Technical studies are in progress. The Regional Development government intends to project can be completed in four years if believes that this project give incentives to poten- funding is found. In fact, Cameroon es- will contribute to the tial investors such as tax timates the cost of this project at CFAF improvement of decentralized mana- and customs duty exoneration on equip- 40 billion (€ 60 million). gement and support private initiatives. ment required for its implementation. Within the project, there is also training JV B-O.D., JV

-20- 2012 / SI 01 Energy business in cameroon Rural electrification: AfDB shows interest

of the Economy and Public Invest- ment Programming said the government of Cameroon has already promised incentives and CFAF 7.3 billion (€ 11 million). Technical studies of the project are already available at the Ministry of Water and Energy. The project im-

According to the Bank, the market is structurally deficient and private operators cannot invest in the development of rural electrification Donald Kaberuka, AfDB President electrification of suburban areas Donald has expressed his bank’s intention and the restructuring of the distri- Kaberuka, without AfDB Pre- to fund the project to the tune of bution network in urban centers. sident has an initial CFAF 54.5 billion. The rehabilita- expressed tion project – building electrical According to the African Deve- his bank’s investment infrastructure and rural electrifica- lopment Bank “specific commercial intention by the State tion – is part of the rural electrifica- procedures will be undertaken to to fund the project to tion program in Cameroon, which increase the number of subscribers, the tune of combined with covers about 649 localities, more to reach the maximum population, CFAF 54.5 than 91 of them being headquarters especially the most disadvantaged.” billion. other special of administrative units spread all To AfDB, rural areas in Cameroon incentives. over the national territory. are characterized by dispersed sett- This project will help increase rural lements and a limited purchasing access to the electricity network power, with a very low consump- plementation period is 48 months if extension via high voltage (HV) to tion of fuel (300 kWh/subscriber/ all funds are available. Meanwhile, existing suburban areas. More spe- year on average). Clearly, according the total cost of the project is CFAF cifically, it will be the construction to the Bank, the market is structu- 68.7 billion (€ 100 million). of mixed lines MT / BT and simple rally deficient and private operators AfDB would provide CFAF 54.5 BT, rehabilitation and extension of cannot invest in the development billion (€ 80 million). AES Sonel HV / MV / LV, construction of dis- of rural electrification without an plans to contribute CFAF 3.6 billion tribution substations, and overhead initial investment by the State com- (€ 5.5 million). switches for making connections bined with other special incentives. and installation of home lighting, Therefore, the General Directorate Jude Viban, B-O.D.

2012 / SI 01 -21- business in cameroon ENERGY

Opportunities exist in energy distribution

Jean-Da- ject to specific obligations imposed vid Bilé, on them in line of the public service General Manager requirements, including the sup- of AES- ply of electricity to any legal entity SONEL. established in the territory of their concession, according to the conditions laid down in their contract.”

Huge perspectives Long before this law, however, the President had, on October 10, 2010, created Hydro Mekin, a State company. It will be responsible for “ensuring the production, and pos- sibly the transmission, distribution, sale, export and import of electrical energy.”

In Cameroon, one company is res- km of lines 220 to 380 KV. AES-So- ponsible for the distribution of nel as of now accounts more than energy throughout the nation. This 780,000 customers with about 45% is the American group AES-Sonel, in the cities of Douala and Yaoundé. operating in Cameron since 2001. Under the new law governing Its monopoly in the distribution of the electricity sector, “a manage- energy lasted for over 10 years, until ment concession on the distribution But all this is still insufficient said the law of 2011 on electric power network has been reached between Jacques Noutang Betchem, Senior ended the AES-Sonel monopoly the State and management of the dis- Research Assistant at the studies and forecasting service in the Mi- nistry of Water and Energy. “The “The distribution of electricity is a very distribution of electricity is a very important component for access to energy. important component for access to energy. Because even if all plants are Because even if all plants are built and there built and there are no power lines, people will not have access to electri- are no power lines, people will not have city. Much remains to be done in this access to electricity.” area, as currently, the distribution is limited to the major cities”, he said. According to him, “the prospects are in this sector. But at the moment, tribution Company”. It defines the even greater than expected as stipu- AES-Sonel is the sole distributor of rights and obligations of managers lated in the law of 2011 on the crea- power in Cameroon. Its distribu- of the distribution networks. Article tion of the distribution Company.” tion network consists of 11,450 km 28 of this law states that “managers line from 5.5 to 33 KV and 11,158 of the distribution networks are sub- Beaugas-Orain Djoyum and Jude Viban

-22- 2012 / SI 01 ENERGY business in cameroon

CFAF 10.3 billion to provide solar power to 150 villages

monitoring this project and training of “Insolation of 4.9 kWh/m2/day for the whole country.” beneficiaries.

Technical studies of the project are available at the Ministry of Water and Energy, and the Ministry for Planning and Regional Development. The total project cost is estimated at 10.3 billion CFAF (€ 15.7 million). The work can be finished within two years. Funding is still being sought by the government of Cameroon that already promised a Authorities at the Ministry of Econo- This project involves the electrifica- reduction of taxes and customs duties my, Planning and Regional Develop- tion of 150 localities in Cameroon by for equipment related to the project. ment seem to give an important place small solar power plants. The project to rural electrification by solar energy also includes training professionals for Ayissi Le Beau in 150 localities. The Growth and Em- ployment Strategy Paper (GESP) indicates that “Cameroon will focus on pro- moting the use of renewable energy” in order to become an emerging country by 2035. Studies to assess

Data from the Agency in charge of re- gulating the electricity sector (Arsel) indicates that the average insolation in Cameroon’s biofuel the northern part of the country where there is huge potential is 5.8 kWh/m2/ day and in the southern part 4 kWh/m2/ potential day. “So there is an average insolation of 4.9 kWh/m2/day for the whole country,” “I see an advantage in studying the pos- said Arsel, an important potential which sibility of developing biofuels from cer- must be capitalized on to provide elec- tain agricultural waste in Cameroon, as tricity to people living in villages. it is done with success in some African According to officials of the Ministry countries apparently,” President Paul of Water and Energy, the national rural Biya said on December 31, 2007 in his electrification coverage varies between traditional end of year message to the 25 and 30%. However, 60% of Came- Cameroonian people. Since 2007, Ca- roon’s population lives in rural areas. meroon is yet to identify crops and the This means that nearly 70% of the rural appropriate site to be used. population lives in the dark. With this At the Ministry of Water and Energy, the Biofuel Development Project is still in its solar energy project, 150 villages could early stage. have access to reliable energy and at a It would take a budget ranging between CFAF 50 and 60 billion (€ 91 million) to low cost. research on the biofuel potential of Cameroon, according to Jacques Noutang Bet- chem, Senior Research Assistant at the Studies and Forecasting Unit of the Ministry According to the President of the Repu- of Energy and the Water. “The government has already taken the first studies that sim- blic, Paul Biya, it is important to consi- ply need to be validated. Based on these studies, investors can inquire about investment der the use of solar energy. “We will save opportunities in the biofuel sector in Cameroon,” he says. our resources and oil, while contributing “Currently, the government is calling on investors to support the completion of this pro- to the fight against global warming,” he ject,” notes Jacques Noutang Betchem. suggests. B-O.D/J.V

2012 / SI 01 -23- business in cameroon MINING

Emmanuel Bonde “Cameroon’s sub soil is rich, even if only 40% has been explored”

Emmanuel The Minister of Mines, Industry, country with a huge and varied in Mbalam and Kribi, bauxite in mining potential. Many experts Bonde: Ngaoundal, Minim Martap Fongo and Technological Development Minister presents the mining potential of have said that Cameroon is a geo- of Mines, and Tongo, Lomié’s nickel-cobalt, Cameroon. logical promised land. This sector, Industry, titanium in Akono-linga, tin in excluding oil is a valuable lever for and Tech- Mayo Darla, uranium in Poli and Business in Cameroon: What is the economic recovery and a real axis nological Lolodorf as well as gold and dia- mining potential of Cameroon? of the government political struggle Develop- monds in the Eastern Region. ment. Emmanuel Bonde: Let me first against poverty. In summary, the following depo- of all thank you for the opportu- In the past few decades, research sits are explored and developed: nity you have given to us to talk has helped to highlight important three Bauxite deposits (Ngaoun- about activities and projects in our minerals, sometimes at a world dal, Minim-Martap, Fongo-Ton- Ministry. Nature has endowed our class level. These include: iron go), two Iron deposits (Mbalam

-24- 2012 / SI 01 MINING business in cameroon

in the east and the Udders Kribi) The sub soil of Cameroon is rich, « In the BIC: What are the minerals that deposits of Nickel-Cobalt and even if only 40% has been explored. past few are already being exploited in Ca- decades, Manganese (Lomié), Uranium Let me use this platform to appeal research meroon? (Poli and Lolodorf), Gold (Ba- to companies that have an interest has helped EB: Apart from useful substances touri, Bétaré-Oya, Bindiba), Dia- in our country that a huge poten- to highlight like marble and limestone, only mond (Mobilong) and Tin (Mayo tial exists and is just waiting to be important two exploitation licenses for in- Darla). With this potential, Ca- exploited. minerals, dustrial mining have been issued sometimes meroon can avoid impoverishing of a world to GEOVIC Cameroon in 2003 the state and its population, but BIC: How many licenses have been class for cobalt and nickel and C & K rather use it as a lift to sustainable awarded in Cameroon and for level. » Mining in 2010 for diamond. The development. which minerals? actual exploitation has not yet EB: Following the April 16, 2001 started, research are ongoing to BIC: What are the mineral re- Mining Code Law and its decree of determine the quality of the depo- sources of Cameroon that could implementation, Cameroon which sits as well as the technology to be interest investors? had virtually no mining explora- adopted. EB: Mining in Cameroon repre- tion licenses and currently has 160 sents 40% of national resources. research licenses and five exploita- BIC: With 160 exploration li- The geology of Cameroon counts tion permits i.e. two exploitation censes, there are very few exploita- substances such as gold, diamonds, licenses for minerals namely nickel, tion licenses. What is the problem? cobalt / nickel, manganese, iron, cobalt and manganese from Nka- EB: The provisions of Articles uranium, bauxite, petroleum (oil, mouna to Lomié and the other for 60 and 65 in the mining code law natural gas), sapphire etc. These are diamond in Mobilong. The other clearly define the composition of some resources that may be of inte- three licenses were granted for application files for the award of rest to foreign investors. marble. exploration permits and licenses

2012 / SI 01 -25- business in cameroon MINING

respectively. First, the applicant EB: The gas potential of Cameroon State, His Excellency Paul Biya, has must comply with the administra- is estimated at 500 billion cubic me- ordered the writing of the industry’s tive procedures to obtain a license. ters and proven quantities are esti- codes of investment. Today, there is Then, it should be noted that re- mated at 115 billion cubic meters. even a single code that is in prepa- searching can take a long time. The President of the Republic pro- ration. Investment remains low in We must make every effort to deter- mulgated Law No. 2012/006 on gas our country, which is why it is im- mine the amount of the deposit and code on April 19, 2012. Just like the perative to develop this single code there are other technical aspects. old law, the new gas code governs with incentives that will focus on We must carry out a feasibility stu- the downstream gas sector which investment rather than on general dy and there is also accompanying includes: activities of transmission, industry. All sectors are covered in infrastructure project to build. distribution, processing, storage, the GESP. Emphasis will be placed Finally, there is, of course, the thor- import, export and sale of natural on the processing of local raw mate- ny issue of funding, you cannot gas and its derivative products in rials, scientific research, technology ignore that mining projects require the national territory. and training, SMEs, exports, etc. To substantial financial resources for This new law has so many special this end, all investors who specialize their implementation. Mining is tax incentives, “to accompany gas in these areas and many more, are not like agriculture, it takes time projects and investments that have welcomed in Cameroon. and patience. The government on considerable expected economic its part also takes all the steps to benefits.” Remarkable advances are BIC: With such enormous poten- protect the interests of the people underway in implementing gas pro- tial, investors will certainly be in- of Cameroon. jects. These include the proposed terested in Cameroon, what kind gas field development by Rodeo of guarantees can you give them? BIC: Are there other areas where Development Ltd in Logbaba, the EB: In view of the great resources we can find diamonds in Came- project to supply gas to the Bipaga available in our country, we are roon? open to all proposals. In all eco- EB: It is in the south-eastern part nomic sectors, the state has provi- close to the border with the Cen- “Emphasis will ded incentives for investment. The tral African Republic, specifically mining and industrial sectors are in Mobilong, Batouri and Yoka- be placed on the no exception to the rule. Wishing douma. The presence of diamonds to establish a relationship based in Moloundou is not yet confirmed, processing of local on trust and mutually beneficial but there are clues. But as I have raw materials, partnership with all investors who stated previously, the Cameroonian wish to do business. Cameroon of- subsoil is explored only at 40%. So scientific research, fers through its investment policy, to date, we cannot say exactly the attractive incentives to businesses amount of diamonds in the country. technology and in order to improve the investment rate, to guarantee the security of BIC: To date, what is the real dia- training, SMEs, enterprises and to enhance their mond potential of Cameroon? competitiveness. EB: You cannot take the risk of exports, etc.” Moreover, Cameroon is at the engaging in rhetoric, the commit- centre of Africa with a thousand tee put in place to conduct studies gas plant in Kribi and the construc- possibilities, among others: geogra- on the real potential of our alluvial tion of a natural gas liquefaction phical location-bordering the Gulf diamonds must present its findings, plant at Mboro in Kribi. of Guinea has become a strategic and it is at this level that we could issue, a country of contrasts, diver- give reliable figures. As for the BIC: If given a lot of investors to sity and above all a remarkable sta- quantities which are in the rock, the select from, what kind would Ca- bility since thirty years. With these evaluation process is in progress. meroon like to have in the mining significant assets adds among other Summarily, it should be noted that sector? things: a population of twenty mil- the diamond potential of Came- EB: The Cameroon encourages lion people, literate, industrious, roon is still awaiting evaluation by investment, because it is a neces- competent and integrated at the experts. sary factor for the revival of the heart of large economic blocks like economy to achieve the objectives the CEMAC countries, the CEEAC BIC: What is the gas potential of found in the Growth and Employ- and Nigeria. Cameroon and which companies ment Strategy Paper (GESP). This is will exploit it? one of the reasons why the Head of Interview by Beaugas-Orain Djoyum

-26- 2012 / SI 01 MINING business in cameroon

Sharing of revenue from mineral exploitation

In Cameroon, Decree No. 2002/648/ volume of material extracted in the PM of March 26, 2002 spells out previous month. Distribution of mining taxes paid conditions for income sharing to the State from artisanal mining and indus- Ad valorem tax - State treasury: 50% trial exploitation of mines as well Existing texts indicate that mine- - Directorate of Mines and Geology: 25% as quarries. This prime ministerial ral substances extracted from the - Local council: 15% decree stems from Law No. 001 of seabed or subsoil are subjected to - Local population: 10% 16 April 2001 which is basically the a tax proportionate to the value of country’s mining code. product extracted, named ad va- The regulations describe that in lorem tax. These substances subject case of non-payment within the Two types of taxes are paid by ope- to the ad valorem tax products are deadline, the ad valorem tax is in- rators with either exploration or extracted merchant state or not ha- creased by 10 percent. “60 days after exploitation permits: the tax on the ving undergone treatment without notification, the mining license can extraction and ad valorem tax. The altering their chemical composition. be withdrawn,” reads the decree sig- first depends on the volume of mi- According to article 144 of the de- ned by former Prime Minister, Peter nerals extracted. It is set as follows: cree, this value tax is set as follows: Mafany Mosongue.

Administrative and technical supervision Paul Hubert Ndonguissop Zekeng, general engineer of mines and Deputy Program Coordinator for securing mining, water and energy revenue (PSRMEE), recently said at a mining forum in Yaounde that the aim of sharing the ad valorem and extraction tax is to ensure that the local population benefits from mines in their localities and also that country’s mines and geology are managed better. The implementation of the sharing system of these taxes “was effective” in 2009 as provided in the 2001 Mining Code, according to Mr Ndonguissop Zekeng. Till date, there is little awareness about this decree at several levels. Hence there is a “sensitization need at the level of operators so that they incorporate unconsolidated materials (clays, • precious stones (diamond, eme- Sapphire. the sharing scheme in their manage- gay, laterites, pozzolans, sands, rald, ruby, and sapphire): 8%; ment, and for the local populations etc.): CFAF 150/m3, hard materials • precious metals (gold, plati- to organize themselves into develop- (stones): CFAF 300/m3. num, etc.): 3%; ment committee to better manage Article 143 of the Decree states that • base metals, and other minerals these revenues, then the directorate before the tenth of each month, (iron, nickel, bauxite, etc.): of Mines and Geology so that these the holder of an authorization or a 2.5%; shares are exact figures from mining license to a quarry shall submit to • geothermal deposits, spring activities,” said engineer Ndonguis- the delegate of mines with territo- water, mineral water, and ther- sop Zekeng. rially competence, a report on the mal mineral: 2%. B-O.D/J.V

2012 / SI 01 -27- business in cameroon MINING

Kribi deep seaport, national rail plan to ease evacuation

port which will be used to export large masses of “The Kribi deep minerals found in Came- roon (iron, bauxite and seaport will be a natural gas in particular) and import raw materials real lever to the for local industries, will be a real lever to the indus- industrialization trialization of Cameroon The Kribi Seaport is Cameroon’s The first and the competitiveness of Cameroon main infrastructure that will allow ship would of its products.” This port the export of minerals and indus- dock at will thus enable miners to the port by and the trialization. Two specialized termi- 2014. ship their ore overseas. nals-multipurpose and container- Alongside this deep sea- competitiveness will be created: The construction port, another infrastruc- of this port by the Chinese com- ture is available for the of its products.” pany, China Harbour Engineering exploitation of minerals Company (Chec) is underway. The in the country. This is first ship would dock at the port by the 1,009 km Douala-Yaounde- facilitating the development of the 2014. But other specific terminals Ngaoundere railway. Once infrastructure sector, in general and will be developed as from 2015. constructed, it will further facili- of the rail network in Cameroon, in tate the export of minerals from particular.” In his view, no sub-regional com-

These terminals include aluminum, Once the country. The Minister of the munity will prosper without reliable oil, alumina, ore, liquefied natural construc- Economy, Planning and Regional infrastructural linkages. And no gas, etc. ted, it will Development, Emmanuel Nganou country will be industrialized wit- further According to the Secretary Gene- facili- Djoumessi explained that thanks hout a viable rail infrastructure. “But ral at the Prime Minister’s office, tate the to this new rail “our iron ore would first, we need to find funds to imple- Louis Paul Motaze, also Chairman export of be easily exploited; likewise the es- ment the plan-the national railway of the Steering Committee of the minerals tablishment of a steel industry for plan,” Nganou Djoumessi added. from the Kribi industrial port complex, “the country. the local production of steel, hence Beaugas-Orain Djoyum

-28- 2012 / SI 01 MINING business in cameroon

Mineral potential of Cameroon From 1960 to 1990, the Cameroo- that there are still enormous mine- nian government, in collaboration ral resources to explore in Came- with internationally renowned ins- roon. titutions such as the UNDP and the Office of Geological and Mining Current projects Research (BRGM) carried out stu- Five mining licenses have already dies to trace the mineral potential been granted: Geovic Company of Cameroon. Following these stu- for the exploitation of nickel, co- dies, over 167 exploration licenses balt and manganese in Nkamouna have been granted, proof of the (Lomié), C and K Mining Company country’s wealth. However, only Inc for diamond and accompanying about 50% of the national territory substances in Mobilong (Yokadou- mining data is available suggesting ma), and three operating permits

Uranium. were granted for the extraction of limestone and marble.

The following companies are currently negotiating mining agree- ments with the State of Cameroon: Cam Iron, a subsidiary of Austra- lia’s Sundance Resources for the mining of iron ore at Mbalam and Cameroon Alumina Limited for the bauxite deposits at Mini Martap near Ngaoundal (Adamawa).

Rutile A deposit of three million tons of rutile reserves exists in Akonolinga, Centre Region. These reserves are larger and extend over a vast area of more than 30,000 km on the outskirts of Centre, South, Coast- line, East and West. Their economic weight is not clearly evaluated.

2012 / SI 01 -29- business in cameroon MINING

Inventories and volumes of deposits of 35 mining zones in Cameroon Estimated Path/ Interpretation of satellite imaging Products unexploited Row reserves Titanium, rutile, garnet gemstone, Akonolinga ilménite Wolframite, pechblende, 3,000,000 tons 185/56 chromite, pyrochlore Bamboutos Aluminium, bauxite 5,000,000 tons 185/55 Bassin de Kadeï Gold 5 tons 184/56 Batouri Gold 5 tons 184/56 Gold, bismuth, lead molybdenum, Bétaré Oya 20 tons of gold 184/56 wolfram diamond Wolframite, pechblende, chromite, Bouendjo Edéa Eboundja Kribi 400,000 tons 185/54 pyrochlore Paro Lawel Sapphires 10 tons 186/56 Centre-Ouest Bauxite, alcrètes 500,000 tons 184/57 Colomines Gold, diamond, gemstones 20 tons of gold 183/55 Titanium, ilménite, wolframite, Dubreuil 400,000 tons 185/54 pechblende, chromite, pyrochlore Eboundja Syénite, néphélinique, feldspath 20 tons 185/54 Fokoué Fokamezoun Bauxites, alcrètes 1,000,000 tons 187/56 Ilménite, wolframite, pechblende, Garga-Sarali chromite, pyrochlore, niobium - 1,000,000 tons 183/57 columbium tantale (Ta2O5), tin, gold Industrial diamonds, diamond Tamonéguézé Ketté Irderé 10,000 carats 183/58 gemstones Kambélé Gold, diamond, gemstones 100 tons 183/57 500,000 tons 55 million tons Kongo Nkamouna Lomié Mang Messea Gold, diamond, gemstones 185/58 61 million tons 17 million tons Kribi Les Mamelles Iron 10 million tons 185/58 Mboutoundou Gold 2 tons 183/57 Mewongo Iron, manganese 100,000 tons 183/58 Minim Martap Bauxites, alcrètes 1,000,000 tons 185/55 Ilménite, wolframite, pechblende, Nange Eboko 1,000,000 tons 185/57 chromite, pyrochlore, titanes Ngaouandal Bauxite 200 million tons 185/55 Mbalam Iron 2,400 million tons 186/58

Source Africommodities – Les Afriques

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Uranium Distribution, by region of “proved” and “developed” deposits of raw materials Fifty uranium targets have been identified, most of which form Localisation of Interpretation of satellite “proved” and geochemical anomalies that were Products identified by systematic mining imaging “developed” inventory work conducted from deposits 1978 to 1987 in the Southeast by 1. East region Bétaré Oya to Dimako Gold the UN and in the Southwest by the French Bureau of Geological and Gulf of Guinea, South region coastline, Mining Research. Mega Uranium Oil, petrochemistry, Company holds exploration per- 2. South-east region Douala-Kribi, Rio del Natural gas mits, and is currently carrying out Rey, Limbé, Lokélé, research work at Poli and Teubang Bakassi in the North, Lolodorf in the South and Ngombas in the Centre. 3. South region Kribi to Ebolawa Iron According to Minepat, a uranium Yaoundé to Rutile, tin, limestone, 4. Centre region deposit of more than 1,300 tons Akonolinga uranium was discovered at Poli. But the real potential of Cameroon is unknown. 5. South region Kribi Bauxite

Graphite 6. Coastline region Edéa Aluminium At least five targets are identified Bonaberi, scattered Cement, diamond, 7. South-east region in Lom around Bétaré-Oya, Yingui deposits, Figuil limestone to the North-East of Douala and Mayo Boula in the Far North. As Source Africommodities – Les Afriques for Titanium, more than 65 targets were identified.

Other minerals Tin has 17 targets. There are two indices of Copper, about 50 targets of Lead, approximately 12 indices of Zinc. 2.5 million tons of marble, Li- mestone about 600,000 tons of reserves, large deposits of Pozzolana in volcanic areas of the Southwest, West and Northwest, sand and gra- vel river. Not only are there industrial quantities of sand as a building material and servicing, but there is also pure sand for glass. BOD

2012 / SI 01 -31- business in cameroon MINING Cameroon: a vast diamond potential

Officially, the artisanal alluvial dia- Cameroonian authorities have no exact ture of a South Korean company and the mond is around five million carats per figures of the country’s real diamond Cameroonian Government. year, but the actual amount of diamond potential. But officially, there is talk of conglomerate is yet to be figured out. a potential of 5 million carats of alluvial Some certitude The Korean company C and K Mining diamonds and diamond conglomerate. However, on August 21, 2012, the Mi- stated that Cameroon had the largest This is why the country has initiated stu- nister of Industries, Mines and Tech- diamond reserves in the world (736 mil- dies to determine its real potential, espe- nological Development, Emmanuel lion carats). These figures have created a cially at Mobilong, east of the country Bonde, said “our pool lies between the controversy as the claims of C and K Mi- where an exploitation license has been Central African Republic and the Repu- ning were not based on solid research. granted to C and K Mining, a joint ven- blic of Congo, two diamond-producing

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cess, states that “BRGM (Office of Geolo- tion from the Ministry of Mines. There- gical and Mining Resources) experts have fore, import and use of rough diamonds is conducted updating studies that bring to only permitted with the countries that are 41, areas where artisanal exploitation of members of the process (Kimberly Process) diamond takes place. The study suggests and in accordance with the principles and an estimate between 3 and 5 million ca- recommendations of the Process.” rats of alluvial diamond. But we have no “Once the diamond is evaluated by experts knowledge of the conglomerate potential.” from the Permanent National Secretariat

“There is no doubt about the existence of an exploitable amount,” reassured Emmanuel Bonde, Minister of Industries, Mines and Technological Development.

Jean Kizito added that it is likely to find of the Kimberly Process, the product is then diamonds in several other regions of the placed in batches in a tamper-resistant country where studies have not been container bearing the seal of the Secreta- carried out yet. riat. For tracking purposes, any holder of a marketing authorization of rough dia- 17 Diamond Zones monds must keep a receipt book stating his According to Cadre d’appui et de pro- name, with reference to the card collector motion de l’artisanat minier (CAPAM), or craftsman, the date of the transaction, a structure that supports and promotes the weight, carats of diamonds, and the artisanal mining diamond deposits were amount paid,” says the order. With this, identified in 17 zones so far in Came- everything is in place to allow the export roon: 9 zones within the large gold of diamonds. BOD stretch that integrates west of the Cen- tral African Republic, southern Chad and Cameroon (parts of the East, Ada- Kimberley Process mawa, North, Far North and including 7 Ambas- in the boroughs of Kette, Ndélélé, Ken- sador dzou (East Region), 7 are in the districts Gillian of Moloundou, Monguele, Kandja, Lo- A. Milo- béké, and Yokadouma. The last target is vanovic. over 15 km in the district of Touboro. Today, the country is a member of Moreover, in the district of Poli (North the Kimberley Process. On August Region) and the Mamfe Basin (Sou- 14, 2012, Ambassador Gillian A. thwest Region), some clues of the pre- Milovanovic, Chair of the Kimberley sence of diamond have been uncovered. Process, notified Cameroon, through All these areas could be explored by po- a letter to the Minister in charge of countries. The presence of alluvial dia- tential investors. Mines, announcing the country’s ad- monds in this area is an indication of the mission to the Process. It also sent a existence of a large stock. Pending the out- Marketing letter to the 77 members of this Pro- come of research in the block indicated, Cameroon has already set the terms of cess: “I am pleased to announce that the there is no doubt about the existence of an diamond marketing. The Minister in Republic of Cameroon is now officially a exploitable amount. I want to reassure the charge of Mines in June 2012 signed an member of the Kimberley Process. […] people of Cameroon on the existence of the order to that effect. we encourage all members of KP to offer diamond and of its quality too.” For more According to this decision, “the import, Cameroon technical assistance if need precision, Jean Kisito Mvogo permanent export, transit and marketing of rough be,” read the letter from Gillian A. national secretary of the Kimberley Pro- diamonds are subject to prior authoriza- Milovanovic.

2012 / SI 01 -33- business in cameroon MINING Cameroon: A country in gold

Cameroon is a country rich in gold. For the moment, gold is not an industrial product, but artisanal. CAPAM (Fra- mework for the support and promotion of mining), says Cameroon will produce close to 16,653.3 kg of gold on a small scale from 2010 to 2015. Artisanal production in 2012 is estimated at 224.8 kg.

Stimulate entrepreneurship The Mining Code of Cameroon autho- rizes artisanal mining, as well as other forms of mining. For the moment, only C and K Mining has a license to “dig” gold industrially although it is yet to

For the moment, only C and K Mining has a license to “dig” gold industrially although it is yet to start exploitation. start exploitation. But with the increased mechanization of artisanal mining, many companies are interested. In Béta- ré-Oya, a locality in Eastern Cameroon, the main gold producing region, eight companies are on the ground. Many of them have an average production of 10 kg per month, according to CAPAM. According to CAPAM at least 140 gold deposits have been identified in Cameroon, the majority being of an artisanal mining nature. Channel the production According to CAPAM at least 140 gold Gold” drive in collaboration with the According to the Ministry of Economy, deposits have been identified in Came- Police to instill order and increase the studies are underway to evaluate the gold roon, the majority being of an artisanal state’s gold reserves at the Central Bank potential of Cameroon. But artisanal mi- mining nature. The gold produced in of Central African States (BEAC). The ning is effective in the eastern, northern the traditional way does not always fol- estimated monthly domestic produc- and southern parts of the country. low formal channels. Out of 100 kg each tion is 170 kg. Through this operation, Gold reserves spread over an area of month, 90 kg go to traffickers. In 2011, CAPAM secures 100 kg with the support 20,000 km2, according to government Cameroon launched the “Operation of the defense forces. sources. BOD, J.V.

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Iron: Cameroon is built on solid ground

Three major Iron Ore deposits are being evaluated: Mbalam, Nkout, and Kribi. It is said that the potential of these three areas can make Cameroon a major producer of iron in the world. According to data published by the Aus- tralian company, Sundance Resources on June 20, 2012, there are 775.4 million tons of hematite deposits in Mbalam with 57.2% iron. According to the company, 95% of the deposit is classified as “indicated”- a point where an estimate has been made with a reasonable level of confidence in accordance with the Aus- tralasian Joint Ore Reserves Committee Code (JORC Code).

Mbalam under negotiation However, according to data from the Cameroon Ministry in charge of mines, iron reserves of Mbalam mine are estimated at 200 million tons of rich iron and 1.2 billion tons of enriched iron. For a better opinion, the government has secured the services of three firms of international reputation who will also help negotiate the mining agreement with Sundance Resources and the Ca- meroon Subsidiary, Cam Iron SA. They are BMCE Capital for Central Africa, Patton Boggs and SRK Consulting. The negotiations are underway. According to the Ministry of Economy, According to data from the Cameroon Ministry in charge of mines, iron reserves of Mbalam Planning and Development (Minepat), mine are estimated at 200 million tons of rich iron and 1.2 billion tons of enriched iron. the total project cost is estimated at CFAF 1,650 billion. The same Ministry lam, that is to say, it falls on the same 8 billion. The total amount of funding says that funding is being sought. “Sun- iron belt as Gabon and Congo. for this project is not yet defined. dance resources is financing the scheme by Cameroon Mineral Exploration (Ca- 80%, CAMIRON, Cameroonian partners minex), the Cameroon subsidiary of the Kribi Iron - 10% and 10% by the Cameroonian go- English group, Affero Mining will ope- There is a huge iron ore deposit in vernment,” says Minepat. rate in this area. Mamelles near Kribi. A research per- According to Caminex, the iron ore de- mit was granted on March 22, 2008 to Nkout deposit under posit at Nkout is more than Mbalam’s. SINOSTEEL CAM SA, a subsidiary of evaluation To complete the geological studies, the Chinese state SINOSTEEL over an area Besides Mbalam, there is another iron preliminary economic studies, the eco- of 978.3 km2. Here, 50% of the studies ore deposit at Nkout, a town about nomic feasibility studies and the final show a potential of 661 million tons twenty miles away from Djoum, in the feasibility studies, Administrators of with 37% Fe. Total estimates should be South Region of Cameroon. It has the Caminex in December 2011, allocated known by the end of this year, 2012. same geological environment as Mba- additional $ 115 million, or about CFAF BOD, J.V.

2012 / SI 01 -35- business in cameroon MINING

Cameroon wants to be the number one African producer of Bauxite

According to the Cameroonian African producer ahead of Guinea company had agreed to carry out government, the bauxite poten- Conakry with 700,000 tons. the studies for these infrastructures. tial of Cameroon ranks fifth in the “CAL endorses bankable expenses of world. There are deposits in Minim 6 billion dollars feasibility studies on the transport Martap near Ngaoundal, north of According to the Cameroon go- infrastructure to be built and then Cameroon. Hydromine Inc. that vernment, the total project cost is we look for a partner to provide the obtained the exploration license of estimated at 6 billion dollars (100 funds to bear costs,” he had told the CAL the two deposits in 2005 passed it to million is planned for the mine and envisages country’s bilingual daily, Cameroon Cameroon Alumina Limited (CAL) 4 billion for the refinery and other the exploi- Tribune in 2010. in August 2009. CAL is a joint ven- infrastructure). tation of ture of Dubai Aluminium (45%), The company has applied for a per- 1.5 million Other Sites tons of Hindalco Indian (45%) and Ameri- mit and expects to obtain the mi- bauxite At Fongo Tongo near Dschang in can Hydromine (10%). ning agreement after negotiations. per year, the Western Region, there are 46 Based on the exploration results, Discussions are centered on the thus million tons at an average grade of the bauxite reserves are estima- construction of railway to enable making 47% alumina. Studies are still unde- ted at 554 million tons. Mineable the transportation of bauxite to the Cameroon rway to determine the cost of the the first reserves are valued at 458 million port of Kribi because in the finan- African project. In Bangem, South-West Re- tons of ore, while CAL believes that cing plan with CAL the construc- producer gion, reserve deposits are estimated additional reserves from 100 to 200 tion of a rail is not included. ahead of at 19 million tons, expandable to 30 million tons could also be defined. The company wants the State of Guinea million tons. Another four million Conakry CAL envisages the exploitation of Cameroon to construct the railway. with tons are located in Foumban in the 1.5 million tons of bauxite per year, Alpha Barry, the project represen- 700,000 West Region, says CAPAM. thus making Cameroon the first tative in Cameroon, stated that the tons.

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Cobalt, manganese, nickel: Geovic starts operation soon

Manganese. Nickel.

Cobalt.

Despite a great potential, in terms of and 0.5% to Cameroonians, states Geo- blem, but it does not belong to Geovic resources Cameroon cobalt, nickel and vic Mining Corporation President, Wil- alone. The State of Cameroon through manganese are untapped and in some liam A. Bukovic. SNI and the State of the SNI controls 39.5% stake in the com- areas still unexplored. Cameroon have already invested about pany. Geovic has 20% equity, and SNI has CFAF 20 billion. 19.5%. When doing fundraising, someone Although the award of the license to pays. However, I believe that today, all exploit cobalt, nickel and manganese Doubts about Geovic pledges have not been honored. So we are was granted to the American Geovic In April 2011, Geovic had submitted its also to be partly blamed for the delay,” he Cameroon Plc in 2003, the exploitation bankable feasibility study approved by explained. of these minerals has not yet started. its Board of Directors. Then proof of To date, information on its launch sche- There are about 100 million tons of ore finances to commence the construction duled to begin in 2012 is neither confir- deposits with 0.2% cobalt, 0.72% nickel of the mine in September 2011, then a med nor refuted.

Annual production could reach: 4,160 tons However there are still many fields to assess. In Cameroon, there are laterite of cobalt, 3,280 tons of nickel, 450,000 tons deposits of cobalt, nickel, manganese in of manganese, and 4,000 tons of scandium. Lomié, East region. According to the Ministry of Mines and and 3.71% manganese. SNI (National sudden halt. The former Minister of Geovic, annual production could reach: Investment Company of Cameroon) Mines, Badel Ndanga Ndinga, tried to 4,160 tons of cobalt, 3,280 tons of nic- holds 20% of shares of Geovic, 19.5% explain the reasons in the Cameroon kel, 450,000 tons of manganese, and belong to another shareholder group Tribune. “There may be a funding pro- 4,000 tons of scandium. BOD

2012 / SI 01 -37- business in cameroon Agriculture Agriculture: Mainstay of Cameroon’s economy

It involves about 70% of the eco- effective agricultural exports. and cotton production is recovering nomically active population and Production is diversified between from the hard weather conditions accounts for as much as 80% of the cash (export) and food crops, ma- that forced a decline in the two sec- primary sector’s contribution to king Cameroon, Central Africa’s tors, an upturn is being experienced GDP. It also provides 1/3 of foreign bread basket. As regards export in palm oil, banana and rubber pro- exchange earnings and 15% of bud- crops, Cameroon ranks 5th in world duction. getary resources. Cocoa and 8th in Coffee production. “With new agricultural techniques Richly endowed with agricultu- Agro-industrial production essen- in place, palm oil yield per hectare Oil palm ral products, Cameroon has ideal tially focuses on these and other plantation will increase from 7 tons/ha to 15-20 conditions to ensure its food secu- export crops like banana, palm oil, in Came- rity and consequently achieve more sugar, rubber and tea. While coffee roon. It involves about 70% of the economically active population and accounts for as much as 80% of the primary sector’s contribution to GDP.

tons/ha. At its peak, 85,000 tons of FFB per year will be expected,” according to forecasts by the Came- roon Development Corporation, (CDC) the country’s biggest agro industrial company. As concerns banana, the government’s policy is to increase its export tonnage from 200,000 tons to 400,000 tons this year.

Animal husbandry Animal husbandry is among the major activities of Cameroon’s economy. Due to natural and human factors, this activity is carried out in different ways throughout the

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national territory predominantly State, with 25,000 employees, pro- Cotton Cotton Development Company using traditional methods. Being duces: palm oil and palm nuts, tea, produc- (SODECOTON) based in Garoua tion in self-sufficient in animal products rubber and banana (makossa and northern has 1,527 workers operating 8 fac- the country annually exports cattle sawa banana). Cameroon Rubber Cameroon. tories that produce 152,815 tons to neighboring Nigeria, cows, sheep Company (HEVECAM) manages of cotton, 62,808 tons of fiber, and goats to Gabon, and about a 76,340 tons of triturated grains thousand heads of small ruminants and 11,345 million litres of oil on to Congo and Equatorial Guinea. Richly endowed with average per year. Cameroon Sugar Cattle in Cameroon are found in agricultural products, Company (SOSUCAM) produces the Adamaoua, in the North and more than 60,000 tons of sugar per North-west regions. While goats Cameroon has ideal annum and employs 4000 people. are raised almost everywhere in conditions to ensure Cameroon Oil Palm Company the country, sheep are reared only (SOCAPALM) for its part pro- in the North and the Adamaoua. its food security duces more than 50,000 tons of Pigs are in the West, Littoral, palm oil and more than 9,000 tons Centre, East, and South-west while and consequently of palm nuts per annum. Palm horses and donkeys are bred in the achieve more effective Oil Plantation (PAMOL) based North, West and Northwest regions. in Lobe, South West region, pro- Poultry is found in all the regions of agricultural exports. duces palm oil, laundry soap and, the country. to a certain extent, rubber. Others such as SEMRY in the North and Major agro-industrial 15,000 hectares of rubber plants Upper Noun Development Autho- companies and a manufacturing industry with rity (UNVDA) in the North West The Cameroon Development a capacity of 26,412 tons of rubber region are involved in rice produc- Corporation (CDC) which is the (94/95) and an employment roll tion. largest single employer after the of 4,300 full-time workers. The J.V.

2012 / SI 01 -39- business in cameroon Agriculture

Funding: a perennial problem facing Cameroon

below demand. This under-productivity costs the State treasury over 500 billion CFAF on food importation in 2010. Scores of projects are underway under the auspices of the Agriculture Ministry to boost the production of food and cash crops for which the demand is very high. These include corn, cassava, mil- let, sweet potatoes, Irish potatoes, bananas, cocoa, coffee, rubber and peanuts, among many others. In order to expand, farmers need capital. Cognizant of the difficulty for farmers to obtain loans from commercial banks in Cameroon, an agricultural bank created by the Head of State, Paul Biya, will become operational as soon as the Central Africa Banking Commission, COBAC gives its approval, Essimi Menye, Minis- ter of Agriculture said in an interview on State Radio. Interest rates on loans for farmers in commercial banks are as high as 15 %, while studies have revealed that less than five percent of Cameroonians have bank accounts. When the agricultural bank takes off, farmers would have greater access to loans at comparatively low interest rates. Meanwhile, development partners such as the European Union have given Cameroon a non-refundable loan of CFAF 13.11 billion to boost agricultural production against the backdrop of a scheme dubbed “program for the improvement of agricultural productivity”, to span through the next five years. Also, the Ministry of Economy, Plan- ning and Regional Development is putting in place a program called “agro- poles” which, according to its coordinator, Jean Claude Medou “will begin with Cameroonian Minister for Agriculture, Mr. Essimi Menye. large producers of corn. Six billion CFAF will be distributed to them in the months Due to the oil boom in the early 1980s, program. This saw an almost 50% cut ahead to enable them boost production agriculture began suffering from neglect in the salaries of civil servants leaving as a way of curbing importation.” The and consequently lack of financing. Cameroonians with little or nothing to money is part of the 200 billion CFAF Things were further compounded by invest in any sector. that government raised from the sale of the economic crisis that hit Cameroon Though blessed with fertile soil and treasury bonds. starting in the mid-1980s forcing the regular rainfall in most parts, Came- country into a structural adjustment roon’s agricultural output is still far J.V

-40- 2012 / SI 01 Business in Cameroon .com Daily business news from Cameroon iPhone, iPad, and Android applications (coming soon) business in cameroon Agriculture

Cocoa : A bright future for Cameroon The 2012-2013 cocoa season is defi- production in some production belts. duction this year, there is no need to nitely on track after the opening cere- Despite this drop in production, worry especially as efforts have been mony presided over by the Minister of government authorities, National made to protect the crop against Trade, Luc Magloire Mbarga Atangana Cocoa Coffee Board (NCCB), Cocoa parasites. Furthermore, the Support in Mbanga in the Littoral region on and Coffee Inter-professional Board Project for the Use of Fertilizers in 1st September 2012. All stakeholders (CICC), Cocoa and Coffee Develop- the Cocoa and Coffee Sectors (PAUE- of the Cameroonian cocoa sector are ment Fund (FODECC) and seven F2C) has ordered more than 800 tons strongly mobilized to improve the Ca- other projects are optimistic about of fertilizer to be distributed to far- meroon brand in order to meet the new next season. Despite the fact that mers’ organizations. demands of the world cocoa economy other major producing countries like In recent years, emphasis has been

All stakeholders in the cocoa sector in Cameroon are strongly mobilized to improve the Cameroon brand. which now lays emphasis on consu- Côte d’Ivoire, Ghana, Nigeria and placed on the training and sensitiza- mer protection. The results of the past Indonesia, have cultivated almost all tion of farmers, who are now better season show a slight drop in produc- their arable land and even grow co- equipped with modern production tion-207,697 tons, against 218,871 tons coa on old plantations, Cameroon’s methods to ensure better yields that in 2010-2012. production potential is ever intact. may fluctuate around 1,000 tons per However, many experts, say that this The country has large areas of unex- hectare. decline in production was due to a dry ploited arable land within the seven These new opportunities, combined season which was longer than expected production belts. Moreover, it has with the gradual increase in produc- and which prevented the normal flowe- a highly conducive climate for the tion would guarantee a bright future ring of the plants. Similarly, there were cultivation of this crop. for Cameroonian cocoa. Cameroon’s many attacks by pests such as the bugs In addition, with the introduction in objective is to produce 600,000 tons and caterpillars during the same period. recent years of high-yielding varie- of cocoa by 2020. These also contributed to a decline in ties, some of which will begin pro- J.V.

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Cocoa transformation: only one chocolate factory

Cameroon currently has just one local cocoa processing firm, Sic- Cacaos, based in the economic capital, Douala, with an annual grinding capacity of 30,000 tons. Although the country has the necessary tonnage and policies to encourage the transformation of Cocoa, its realization is still very much awaited by the authorities. However, Morocco’s leading chocolate-making company, Com- pagnie Cherifienne de Chocola- terie, said it will build a 40,000 ton-per-year chocolate factory in Cameroon this year, according to Reuters. The attraction of cocoa farming in Cameroon is that it often allows New demands of the world cocoa farmers to plant food crops for economy now put an emphasis on subsistence and cocoa for cash on consumer protection. the same piece of land. In most parts of Cameroon the labour The attraction of cocoa farming is that it intensive nature of cocoa production allows for large farm sizes, often allows farmers to plant food crops for with most farms being about 0.5 subsistence and cocoa for cash on the same to 13 hectares in size. Perked up by the upsurge in prices piece of land. and the measures taken by the government, according to the African Report, the production of cocoa rose from 170,000 tons in 2007, to 230,000 tons in 2009 and 250,000 tons in 2010, placing the country fifth amongst global producers. Statistics from the Cocoa and Coffee Inter-professional Board (CCIB) show that cocoa production and exports have been on a steady rise in the past five years. Production moved from 190,870 metric tons in the 2009-2010 season to 219,000 metric tons in the 2010-2011 season. Authorities of the Ministry of Agriculture and Rural Development put the 2010- 2011 production at 240,000 metric tons. Production is projected to Chocolate from Morocco’s leading hit 350,000 metric tons in 2015. chocolate-making company, Com- pagnie Cherifienne de Chocolaterie. JM

2012 / SI 01 -43- business in cameroon Agriculture

Strengths of coffee growing in Cameroon

Cameroon has major strengths for also has weaknesses. tons of Robusta respectively and the production of coffee: fertile Following active participation and to export at least 80,000 tons, com- soil and an ideal climate for coffee funding from the Cameroonian prising 15,000 tons growing; farm expansion possibi- government in tune with the radi- By 2015, of Arabica and lities; an active and young popula- cally changing fundamentals of the the govern- 65,000 tons of ment tion; a long tradition of coffee pro- industry, coffee trade is indicating hopes to Robusta. duction and thorough knowledge an upsurge. produce J.V of the product by producers; a di- In 1996, Cameroon, the 12th largest 25,000 tons verse production (Arabica and Ro- producer, harvested 132,000 tons of of Ara- bica and busta). Also, the country has good coffee. In 2008, production fell to 100,000 product processing services in the 43,000 tons. In 2010, it was estima- tons of production zones; Good handling ted at 50,000 tons of Robusta and Robusta. services at port level in Douala (wa- 12,000 tons of Arabica. By 2015, rehouses, warehouse receipt etc.); the government hopes to Cameroon coffee has an intrinsic produce 125,000 tons quality which is appreciated in the including 25,000 market, particularly in Europe. tons of Ara- In production zones, the coffee bica and sector in Cameroon has kept its 100,000 image as a sector which facilitated the education of many of the elite and substantially contributed to the development of Cameroon. This is why many of its stakeholders are prepared to either remain or re-en- ter the sector. However, the coffee sector in Cameroon

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Makossa banana: 100% Cameroon brand With its newest brand, the Came- and Côte d’Ivoire put together but roon Development Corporation’s there was a huge potential yet to be (CDC) “Makossa banana”, serious exploited. efforts are being made to increase Stakeholders in the sector crop production in order to meet envisage an international de-

mand. Cameroon plans to begin exporting to South East Asian countries, notably China, duction of this cash soon. Conquering the vast Chinese crop at a time when market is one of the paramount annual banana stakeholders seek to step up not concerns of the country’s pro- production of 500,000 tons only the quantity but also the qua- ducers. In an intergovernmental in the country by 2015. lity on the international market. In experts meeting organized in col- Cameroon exported 281,282 tons value terms however, the sector has laboration with the Food and Agri- of bananas in 2008, some 254,610 benefitted from higher prices, stan- ding at 40,520 billion CFAF against 33,487 billion in 2009, showing an The Minister of Agriculture revealed that increase of 21 per cent. Cameroon Cameroon’s production is more than that of has considerable wealth and a huge production potential. All that is Ghana and Côte d’Ivoire put together but there needed is additional financing and was still a huge potential to be exploited. assistance to facilitate competitiveness on the international market in the future. With this support, the cultural Organization, the then Mi- in 2009 and 237,942 in 2010. This Cameroonian banana sector could, nister of Agriculture, Jean Nkuete information contained in the eco- within years, be the leader in the revealed that Cameroon’s produc- nomic magazine “Investing 2012” country’s agricultural sector. tion is more than that of Ghana shows a steady decline in the pro- J.V

2012 / SI 01 -45- business in cameroon Agriculture

Rubber: Upsurge in world demand provokes gov’t interest

Cameroon holds the 11th position of the tural rubber stood at 52,497 tons, down earnings of about CFAF 20 billion per world’s producers of natural rubber and by 1.8% compared to 2008”. The Came- year. This industry provides 2 percent of is one of the few African members of roonian government puts the 2010 Cameroon’s export revenue. the International Study Group on rub- figures at 53,433 tons. These statistics ber (similar to OPEC for oil). And the represent a 10,000 tons decline in pro- Major producers demand for rubber is on the increase. duction in recent years. Although there In Cameroon, three agro-industrial The economic crisis that shook the ma- has been a steady increase in the output, companies are the big producers of jor industrial countries had a severe im- it is still short of the volume in the years rubber. These companies have been pact on the rubber sector in Cameron. 2000s. But rubber remains an essential carrying out reforms to boost output. “At the end of 2009,” said the Cameroo- component of the Cameroonian econo- HEVECAM taken over by GMG Inter- nian authorities, “the production of na- my, with nearly 30,000 jobs and export national (a Singapore giant) contributes over 50% of total production while the Cameroon Development Corporation (CDC), a State enterprise produces 40%. The investments, intended to conso- lidate CDC ahead of future privatiza- tion, would raise rubber production by 5 percent and banana production by 10 percent, CDC Communications Officer, Charles Endeley said. CDC produced 22,356 tons of rubber in 2008, mostly for export to Asia. The third operator, SAFACAM, has an output of 5,000 tons per annum.

Village plantations Currently, the village plantations provide 10% of the national production (from an area of 400 hectares) and the authorities want to increase this share by at least 50% in 10 years. A study conducted in 2011 on the issue, showed that the establishment of a plantation of one hectare is equivalent to about 1 million CFAF. Cameroonian strategy relating to rubber embraces the recovery of volume of production, renovation of plantations (some date back to some 40 years), the search for competitiveness, quality improvement and development of processing industries. On this last aspect, the country lags behind. Only 10 % of the output is processed locally, the rest is currently exported mainly to the EU and to a lesser extent, to Asia. Natural rubber from Cameroon. J.V

-46- 2012 / SI 01