Thursday, September 21, 2017

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Full Newsletter issue #3

- USD 4 million : Zoradox's total investment in Kango Nord.

- 75% shares of CIMAF in CIMGABON.

- COMILOG's to rehabilitate Mouilili River.

- Gabon willing to join back EITI.

- Gabon 7th African country to sign OECD convention on tax matter.

- 85%-15% NTDMCC and SEM shares in JV for manganese deposit in Okondja.

- CGCO builds 1st shop in Ndjolé.

 

Special Dossier

 

THE SEM DURING THE NYFA

On the occasion of the third New York Forum Africa (NYFA) which is taking place in Libreville (Gabon) from May 23 to 25, Société Equatoriale des Mines (SEM) is bringing together corporate managers, experts and opinion leaders for discussions on the major issues related to the mining sector in Africa and in Gabon.

 

SEM organized a plenary session on the theme of "100% local processing of mining resources: how can we achieve such goal?" as well as two workshops on the themes of "the role of national mining companies as drivers of the development of their countries' mining sector" and "State-operators partnerships in Gabon: issues and best practices."

SEM's CEO, Mr. Fabrice Nze-Bekale, states that "through these workshops, SEM is offering a forum for discussion and sharing on the main issues related to the development of the mining sector in Africa. Local processing of resources, strengthening the role of national mining companies and creating public-private partnerships are the main issues on which mining players, in this case companies and governments, must share best practices in a view to engage in an optimal and rational management of mining resources. Many African countries are currently experiencing the same situation as Gabon, for which modernizing its mining sector has become a priority. Gabon has embarked in an ambitious policy aiming at diversifying its economy where this high potential sector is to play a vital role. It is incidentally one of the pillars of the national strategy for industrialization."

Plenary session: "100% local processing of mining resources: how can we achieve such goal?"

Processing mining resources locally is a major issue for many African producing countries struggling with the development of infrastructures and strengthening, even creation, of local skills involved in ore processing.

Africa is significantly disadvantaged in the global mining economy. The continent is at the beginning of the value chain of the mining industry despite the 30% of the world's reserves of mining commodities it possesses. Ores mined in the continent are directly exported without any processing. This situation upholds the relevance of the theme of the local processing of mining resources as part of the New York Forum Africa.

On June 1st, 2013, during the 5th Tokyo International Conference on African Development (TICAD), the President of the Gabonese Republic, H.E Ali Bongo Ondimba, stated that "Developing the African economy consist in permanently linking it to technical progress. The business world must set up fairer and more equitable rules for the transfer of technologies. This is why, I am suggesting you to make the commitment, here and now, to set 2020 as the date after which any commodity from Africa will no longer be exported without primary processing on the African territory."

The Head of State repeated this message on several occasions: on September 24, 2013, during the 68th General Assembly of the United Nations, on October 17 and November 19, 2013 during the Business Forum in Grand-Baie, Mauritius, and the 3rd Africa-Arab Summit in Kuwait City respectively.

The discussions during the plenary session which chaired by Mr. Cheikh Ibrahima Diong, CEO of Africa Consulting & Trading, was about the issues of the creation of skills, the establishment of regulations and the promotion of good governance and transparency in front of the stake of the local processing of mining resources.

The participants in the plenary session wereMrs. Zouera Youssoufou, World Bank Resident Representative in Gabon, Mr. Mike Elliott, Representative of Global Leader Mining and Metals EY and Mr. Ebenezer Essoka, Vice President Africa and CEO of Standard Chartered Bank (South Africa), Mr. Günter Nooker, German Chancellor Angela Merkel's G9 Personal Representative for Africa and Mr. Fabrice Nze-Bekale, CEO of Société Equatoriale des Mines (SEM).

Workshop I: "The role of national mining companies as drivers of the development of the mining sector in their countries"

In Africa, mining is mainly carried out by western-countries companies. African countries do not make the most of their mineral potential since mining is characterized by extraction end export of raw ores which bring in less than exports of finished or semi-finished products. For instance, as regards manganese, which is the main mining resource exploited in Gabon, one ton of the ore turned into ferromanganese has an added value 2.9 times higher than that of raw manganese.

Past years were marked by an increase in the number of national mining companies. This demonstrates the will of states to be involved in the development of resources. This shift occurs particularly in a context marked by soaring commodity prices over 2003-2008.

The development of these national mining companies is facing major challenges such as the establishment of an efficient framework in line with international standards of the industry, the access to funding, technical skills attainment, etc.

As part of this workshop, which was chaired by Mr. Robert Tashima, Regional Editor Africa at Oxford Business Group, the panelists discussed on appropriate management models to guarantee efficiency operations for national companies, support to the development of local subcontracting of the same companies, Corporate social responsibility and manpower training.

The participants wereMrs. Rosalind Kainyah, CEO of Kina Advisory, former CEO of Debeers USA and former administrator of Tullow Oil, , Mrs. Amina Benkhadra, Director General, Office National des Hydrocarbures et des Mines (Morocco), Mr. Christian Mion, Head of Advisory Mining Middle-East and Africa, EY and Mr. Tafsir Camara, Corporate Secretary of Société Equatoriale des Mines.

Workshop II: "State-private operators' partnerships in Gabon: issues and best practices."

Public-private partnerships have been developing all over Africa and in every sector. They are now a preferred framework for cooperation in resources development projects and power and transports development projects.

As part of its project for industrialization and economic diversification, Gabon has engaged in strategic State-private operators' partnerships in various fields. For instance, the Agence Nationale des Grands Travaux (ANGT) and the Bechtel group are partners in the design and implementation of the National Infrastructure Master Plan (SDNI, in French). In addition to that, the State entered into partnership with the group OLAM, for the construction of the special economic zone in Nkok (province of Estuaire) and the production of palm oil, Telemania, for the construction of two power stations in Libreville and Port-Gentil, as well as Tropical Holding in the sector of fishing.

Some conditions are necessary to have successful PPPs, especially as regards negotiations between parties, projects preparation and the implementation.

Consequently, successful of failed PPPs often affect the international reputation of the parties involved in that king of cooperation model. This a major issue for States seeking for financial and technical partners for the development of their projects.

The discussion during this workshop, chaired by Mr. Fabrice Nze- Bekale focused on appropriate cooperation models as part of PPPS, strengthening State-private operators' partnerships in Africa and regulations with the intention to create an environment favorable to PPPs. They also allowed depicting PPPs in Gabon, including Eramet for the construction of the Moanda Metallurgical Complex and the exploration of the polymetallic deposit of Mabounié ; Olam for the development of Special Economic Zone of Nkok and the plantation of palm oil and rubber trees; Falcon Eye for the construction of two hydroelectric power plants in partnership with Telemania ; or Tropical Holding for the development of a local fishery industry.

This panel gathered :Mr. Pietro AMICO, Eramet's representative in Gabon, Mr. Gagan GUPTA, OLAM Gabon's CEO, Mr. Himmunt JUGDUHT, representing Tropical Holding, Mr. Yair GAON, Falcon Eye's CEO and Telemania's CEO and Mr. Jean-Luc Wilain, Chief Operating Officer at IBL.

 

MINING NEWS

 

IRON/GOLD: Appolo Minerals Ltd and Zoradox partner for the iron in North Kango

Apollo Minerals and Zoradox Ltd, two companies from Australia and Middle East respectively are partnering into a joint-venture with the aim to developing the iron and gold prospecting project in Monts de Cristal.

The Australian company, Apollo Minerals Ltd, and Zoradox Ltd, a group from the Middle East signed an agreement establishing the formation of joint-venture for the development of an iron and gold prospecting project in Monts de Cristal.

Zoradox Ltd, which acquired 50,1% of Apollo Gabon SA, the Gabonese subsidiary of Apollo Minerals Ltd, will finance the exploration and development operations of the concession up to USD750000 for 2014.

From 2015 to late 2017, the group from the Middle East will invest USD3.25 million for the continuation of such operations. The total investment will therefore represent USD4 million over 2014 to 2015.

In January 2013, Apollo Minerals Ltd had published the findings of the analyses of the samples taken on this site which spreads over 400 km2. They revealed a very high quality iron ore concentrate (69%), with a very low level of impurity along with a very good yield (49%).

The current exploration activities consist in " the assessment of a prospect located south east of the concession, with a high amount of ore ready to be directly charged in furnaces" according to a press release from Apollo Minerals Ltd.

CEMENT: CIMAF takes Heidelberg's shares in CIMGABON

After announcing the construction of cement plant in Owendo, the Moroccan company, CIMAF, takes the shares of Heidelberg, the German company, in CIMGABON which has been experiencing significant successive losses.

The Moroccan group, Ciment d'Afrique (CIMAF) takes the shares of Heidelberg, the German company, in the company Ciments du Gabon (CIMGABON).

Heidelberg had 75% of holdings in CIMGABON which experienced successive losses of XAF5.8 billion and XAF5 billion in 2012 and 2013 respectively. The operation of CIMGABON's plants located in Owendo (suburban area south Libreville) and Franceville (province of Haut-Ogooué) generated significant losses.

"CimGabon experienced a cut-throat competition, with increased massive influx of imported cement which deprived the company from 72% of the local market shares and caused huge financial losses", CIMGABON's Managing Director, Mr.Khalid Iben Khayat, stated. (Statements provided by Xinhua).

The transaction made by CIMAF will allow boosting production and creating local jobs while contributing to improve competition in the cement market in Gabon.

In 2013, CIMAF announced an investment of XAF19.7 billion (USD40 million) for the construction of a cement plant in Owendo with a production capacity of 500,000 tons per year.

ENVIRONMENT: COMILOG is on the verge of rehabilitating the Moulili river

COMILOG brings together political, administrative and environment actors for a seminar on the rehabilitation of the Moulili river, which was contaminates by mining activities.

The Compagnie Minière de l'Ogooué (COMILOG) organized a seminar on the rehabilitation of the upstream portion of the Mouilili River, which is located near the COMILOG's industrial zone, 5 kilometers from Moanda (Haut-Ogooué).

The seminar, which took place from 23 to 25 June 2014, aimed at discussing on a method for the rehabilitation of the water course contaminated by the company's mining activities. The workshop brought together 80 participants of which members of the public administration, national and local elected representatives, experts, NGOs a long as representatives from the directorate generals for the Environment, Mines, Industry and Water Resources and members of the COMILOG's Managing Committee.

A white paper on recommendations developed at the end of the seminar was submitted to the relevant authorities in the hope of having orientations adopted for the continuation of the rehabilitation works initiated in 2010.

While congratulating COMILOG for initiative, the Director General of the Environment, Mr. Léandre Ebobola Tsiba, said: "This is a first time in our country that a company requests the participation of various stakeholders in order to discuss and find solutions for a national issue, though limited."

Such initiative is in line with the draft of the new mining code which contains provisions for the prevention of the environmental impacts of the companies' activities and the accountability of the operators in the rehabilitation of the sites they contaminated. The law is currently being examined by the Parliament.

The CEO of COMILOG, Mr. Jean Fabre, said: "we believe that involving all the stakeholders at such anticipatory stage of the project for the rehabilitation of the upstream portion of the Mouilili river constitutes a guarantee for pragmatic and consensual solutions."


INSTITUTIONAL NEWS


Transparency: Gabon is considering joining back the EITI.

The Minister of Mines, Industry and Tourism brings together development partners in order to adopt an approach for Gabon to join back the Extractive Industries Transparency Initiative.

During a meeting with development partners, the Minister of Mines, Industry and Tourism, Mr. Régis IMMONGAULT, briefed its interlocutors on the decision of the government to consider the terms for a return of Gabon to the Extractive Industries Transparency Initiative (EITI).

At the end of the discussions, the development partners formalized their adherence to this participatory approach.

Preparing the application file will consist in a series of consultations and workshops on the content of the file and rationale. This phase, which is to last twelve months, will permit to validate the orientations of the project for Gabon to join back the EITI. It will involve all the stakeholders including companies, administrations and NGOs.

The examination of the application by the Board of the EITI, which will decide on Gabon's request, will be carried out according to very specific criteria.

In order to start such process, the government will organize a workshop which will allow all the actors to discuss the practical arrangements of such return to the EITI.

In February 2013, Gabon was delisted from EITI because it did not comply with a number of criteria, including the development of a national work plan and the non-submission of declarations by the government based on audited accounts.

 

Taxation: Gabon signs an agreement with the OECD

Gabon signs the Convention on Mutual Administrative Assistance on Tax Matters so as to fall within an approach of exchange of information and good practices .

Gabon recently signed the Convention on Mutual Administrative Assistance on Tax Matters that 34 countries of the Organization for European Cooperation and Development (OECD) set up in 1961.

During the ceremony, which took place in Paris at the head office of the organization, Gabon was represented by its Ambassador in France, H.E. Germain Ngoyo Moussavou.

Gabon's decision aims at strengthening the tax system as part of its move towards its economic diversification. In a press release from the OECD, Mr. Pascal Saint-Amans, the Director of the OECD's Centre for Tax Policy and Administration highlighted "Already a member of the Global Forum on Transparency and Exchange of Information for Tax Purposes since October 2012, Gabon's commitment today plays an important role for regional co-operation in tax matters and demonstrates effective action towards greater exchange of information." Gabon will benefit from the opportunities offered by the organization as regards exchange of good taxation practices.

Gabon is the seventh African country, after South Africa, Ghana, Tunisia, Morocco, Nigeria and Cameroon, to sign the Convention.

 

SOCIETE EQUATORIALE DES MINES' ACTIVITIES


SEM and NTDMCC are partnering for the exploitation of manganese in Okondja.

Société Equatoriale des Mines and Navodaya Trading DMCC group create Gabon Manganese & Ferro Alloys to develop the manganese deposit of Okondja.

Société Equatoriale des Mines (SEM) and Navodaya Trading DMCC (NTDMCC) signed an agreement establishing the formation of a joint-venture called Gabon Manganese & Ferro Alloys (GMFA) of which 85% and 15% of the shares are owned by NTDMCC and SEM respectively.

A broader scope of activity

GMFA will be involved in all the activities related to prospecting, exploration and mining of the deposit's ore. The company will also conduct the ore processing, conditioning, storage and marketing activities.

"Local processing is a matter of very particular interest to the SEM as it is one of our missions. While discussing with NTDMCC, we stressed on the necessity to process the ore in Gabon so as to create added value and develop local skills. Our partner understood our will and we are engaging in on a sound basis." the CEO of SEM, Mr. Fabrice Nze-Bekale, highlighted.


A promising deposit

A report produced in 2005 by the Brazilian group, Vale, estimates the reserves of the deposit at 27 million tons of manganese with a grade between 35% and 40%.

"The findings of the initial works confirm the potential of the deposit and there is possibility for adding to reserves by carrying on exploring in the surrounding plateaus." The Business Development & Strategy Manager of SEM, Mr. Bareja Youmssi stated.

Management of the company

GMFA is managed by a board of directors - consisting of seven members appointed by both parties - and an executive board headed by NTDMCC. The company is incorporated in Gabon with a head office in Libreville. Navodaya Trading DMCC (NTDMCC) is a company registered at Dubai Multi Commodities Center. The company is an associate member of Dharni Sampda Pvt, an Indian company with competencies, notably technical ones, know-how and experience in the mining industry.

"Gabon is a country endowed with abundant mineral resources. We established here in 2011 and are delighted with this opportunity to actively participate in the country's growth. We are going to attempt to enhance the manganese reserves in Okondja in order to attain a world-class manganese deposit. The hydroelectric power generated in Poubara will be used to produce ferromanganese in Gabon. This investment will allow generating local employment and contributing to the communities' education, health and welfare. We will also be investing in infrastructures, notably railway wagons as well as port facilities." The CEO of the Group Dharni Sampda Pvt, Mr. Sachin Bajla said.

Exploration investments will be funded by both partners in proportion to their shares in the project, i.e. 85% and 15% for NTDMCC and SEM respectively.

Finally, as mining will commence, Exploration investments will be funded by both partners in proportion to their shares in the project, i.e. 85% and 15% for NTDMCC and SEM respectively.

.Furthermore, SEM will have a call option on an additional 10% at the market value on its behalf or on behalf of other Gabonese investors.

 

CGCO builds its first shop in Ndjolé.

CGCO establishes the very first shop in Ndjolé in a move to support the action of its gold buying center and reinforce the social impact of its action in the gold-bearing province of Moyen-Ogooué.

On last 9 July, as part of the establishment of shops in artisanal gold mining sites, the Comptoir Gabonais de Collecte d'Or (CGCO) made a visit to Ndjolé (Moyen-Ogooué) to monitor the progress of the works in this new facility which is supportive of its buying center.

The shop, which is located in the village of Makala (Moyen-Ogooué), will allow artisanal gold miners selling CGCO their gold output without using to middlemen. The shop will provide with foodstuffs as well as primary products required for artisanal gold mining. This is the very first facility of the kind which will be a blueprint for the opening of other miners' shops in Gabon.

During this visit, the members of CGCO also briefed the locality's inhabitants on gold collection and the social project to be developed through the establishment of the miners' shop.

CGCO's Operations Manager, Mr. Wesbert Moussounda, said: "we decided to build miners' shops to make direct and permanent contact with artisanal gold miners. Miners' shops will improve the impact of the actions on the artisanal gold miners and their relatives' living conditions."

Moreover, the CGCO resorts to the local workforce for the construction of the shop store in Ndjolé. This initiative, which generated incomes for the local workforce, will be duplicated during the construction of other miners' shops.