Wednesday, November 22, 2017

 (241) 01 72 20 88

Full Newsletter issue #4

DOSSIER SPECIAL

GABON TOWARDS JOINING BACK THE EITI

What is the EITI?

The Extractive Industries Transparency Initiative (EITI) is a coalition of governments, companies and civil society organizations. The organization is based on the EITI Standard that requires the disclosure of information on taxes and other payments made by mining, gas and oil companies to governments.

The EITI Standard, which is overseen by the International EITI Board, contains a set of requirements that countries need to meet to be considered as an EITI Candidate and ultimately an EITI Complaint country. The EITI has thirty one compliant countries and seventeen candidate countries.

Background …

Gabon joined the EITI in 2004 and established an interest group with a view to manage its project for being part of the organization. In 2007, the country achieved the Compliant status. Pursuant to the EITI rules, Gabon was required to publish reports that disclose taxes paid by companies and other payments made along with the payments collected by the government.

In October 2010, during the conference in Dar Es Salam, Gabon was declared close to compliant. The non compliance status of the country resulted from the fact that the report Gabon submitted did not include published data.

Under the 2011 EITI Rules, a country is required to complete its validation within 2.5 years of achieving compliant status. For this purpose, Gabon was granted additional time for the review of its candidacy and, in 2012, the EITI noted that seven out of the twenty requirements of the 2011 EITI Rules were still not met. This led to Gabon delisting on 27 February 2013 during the EITI Conference in Oslo.

The 7 requirements…

According to the 2011 EITI Rules, Gabon failed to meet the following seven requirements:

 

Requirement #5: "A fully costed work plan in accordance with the deadlines for disclosure and validation"

Requirement #12: "Company reports based on audited accounts"

Requirement #14: "Companies comprehensively disclose all material payments"

Requirement #13: "Government reports based on accounts audited to international standards"

Requirement #15: "Government agencies comprehensively disclose all material revenues"

Requirement #17: "The EITI Report must be comprehensive, identify all discrepancies, where possible explain those discrepancies, and where necessary make recommendations for remedial actions to be taken"

Requirement #18: "The EITI Report must be comprehensible and publicly accessible in such a way as to encourage that its findings contribute to public debate"


Initiatives towards a new membership …


In 2013, the President and the government instructed the Minister of Mines to initiate discussions on the feasibility and the means and conditions for Gabon to join back the EITI. The tone was set for the development of a participative approach through the involvement of all the parties and the creation of a synergy around the reintegration of Gabon to the EITI.

Through that decision, Gabon demonstrates its political will to adhere to the EITI Standard which is a genuine label of transparency. This ambition is consistent with the Strategic Plan for an Emerging Gabon that aims at developing industries in a transparent manner so as to make the sectors more attractive for investors.

An initial workshop on the theme of "Issues of the EITI for the extractive industry - Case of the mining sector" was organized in December 2013. The event was intended to discuss on the seven requirements which were not met and make recommendations incorporated in the report drafted by the firm KPMG.

The report indicated the necessity to separate the decision-making and guidance body from the technical bodies which have to carry out a fundamental work on the process. Technical bodies must be reinforced with qualified staff and means in order to carry out their functions.

The report therefore stressed the interest to involve civil society organizations, local communities, legislators and media in order to conduct awareness actions for the public and encourage them to participate in debates.

It also recommended developing rules for the functioning of the decision-making and guidance body so as to strengthen the institutional framework of the EITI in Gabon.

Further to this workshop, in August 2014, the Minister of Mines brought together development partners to notify them of the decision of the government to consider the conditions for Gabon to join back the EITI. During the discussion, development partners gave their support to the initiative.

A second workshop on the theme of "Reflection on Gabon's comeback to the EITI" took place later in October 2014. The event was attended by 170 participants including representatives of Gabonese administrations and institutions, the EITI, development partners, members of the diplomatic missions and civil society and extractive companies as well as the firms previously involved in the process.

The workshop was organized around four committees: "EITI Governance", "Budget and financing of the EITI", "Ability of Gabon to implement the Sydney Standard" and "Awareness, communication and dissemination".

Others sessions dealt with the former EITI requirements Gabon failed to meet and the technical aspects around the new membership.

The committees produced a set of recommendations on organizational and financial aspects to strengthen the role of the EITI Group in Gabon.

As for the organizational aspect, the committees recommended the establishment of three bodies. First, the Multi-Stakeholder Group composed of representatives of the administration, the civil society and the extractive companies. Secondly, the Working Group comprising of employees of the Treasury, customs, Tax administration and of the directorate general for Debt, Oil, Mines and Geology, Caisse de Dépôts et Consignations (Consignments and Loans Fund, in English) and the technical offices of the ministers for Economy and the Budget. Therefore, it was suggested that an Independent Ethics Group is established consisting of donors, legislators, local communities from the extractive areas, members of religious orders, representatives of the International Labor Organization, a representative of the National Ethics Committee and a representative of the Committee and a representative of the Economic and Social Council.

As far as finance is concerned, the proposed budget for Gabon's EITI Group until the validation of the comeback of the country to the EITI was set at 1 billion FCFA (US$ 2 million) compared to 180 million FCFA (US$ 360,000) initially. The contributions of the parties for the budget were proposed as follows: 50% from the Gabonese government, 25% from the World Bank, 20% from the European Union and other development partners and 5% for Union Minière du Gabon (UMIGA), the Gabon's mining companies association as well as the Union Pétrolière du Gabon (UPEGA), Gabon's oil companies association.

 

MINING NEWS

 

MANGANESE: Gabon engages in local processing.

COMILOG announced the commissioning of the first plant of Moanda's Metallurgical Complex. A new context that embarks Gabon on manganese processing.

Compagnie Minière de l'Ogooué (COMILOG), which links the French group ERAMET and Société Equatoriale des Mines (SEM), announced the commencement of the activities of Moanda's Metallurgical Complex (CMM, in French) in the province of Haut-Ogooué.

The first pyrometallurgical plant of the complex was commissioned on 12 august 2014. It has a production capacity of 65,000 tons of silicomanganese per year. The second pyrometallurgical plant is to be operational in January 2015 and produce 20,000 tons of metal manganese per year.

The CMMM is fuelled with electric power from the Grand Poubara dam. The facility, which was built by the Gabonese government, accounts for an investment of 200 billion FCFA (US$400 million).

The CMM, a project that required an investment of 150 billion FCFA (US$ 300 million), constitutes a pivotal step in the industrialization of the mining sector in Gabon.

These objectives are set as part of the Strategic Plan for an Emerging Gabon (PSGE, in French) that promotes a sound management of natural resources through their local processing and the creation of skill labor for such purpose. As part of the CMM project, various engineers and technicians were trained in metallurgical and steel processes.

With the CMMM, Gabon positions itself as one of the pioneers in manganese processing in Sub-Saharan Africa. South Africa used to be the only African country with that type of complex.

MANGANESE: Clear optimism in NoGa Mining SA.

NoGa Mining expects an increase in the production of manganese over the next three years in the Beniomi permit. The company relies on the development of transport and storage infrastructures.

NoGa Mining SA (NoGa) represented their objectives of production in Beniomi in Franceville (province of Haut-Ogooué) that they own since June 2013.

NoGa Mining sets their objectives of production of average quality manganese to 750,000 tons, 1,500,000 tons and 2,000,000 tons respectively for the first, second year and third years of activity on the site.

In November 2014, the company will inaugurate a second manganese upgrading plant with a production capacity of 325,000 tons per year. A plant for the production of manganese alloys is also being built.

Moreover, NoGa Mining is negotiating with the Société d'Exploitation du Transgabonais (SETRAG) for the transport of their production from Franceville to Libreville through the railway between the two towns. These negotiations are intended to make railway available at the terminals in Franceville and Libreville where NoGa Mining is building storage facilities that are to be operational from March 2015. These arrangements will make it possible for the company to haul 16,000 tons of manganese per week to the terminal in Libreville.

The CEO of NoGa Mining, Mr. Phil Mason, highlights that "Beniomi is a promising project and the parties involved are very enthusiastic about its development. We have a huge support from the government and the local administrations for the development of our activities. They have a major socio-economic impact in the area of the mining zone" .

The Beniomi permit with a surface area of 800 km2 was initially owned by BHP Billiton. The Australian had conducted various studies to assess the reserves in manganese. The Gabonese government owns 10% of the shares of NoGa Mining, the subsidiary of the Indian group, Coalsale. The shares are to be transferred to Société Equatoriale des Mines soon.

Zinc/Lead: encouraging findings for Metals of Africa.

The Australian resources company, Metals of Africa, released the findings of the analyses of the samples from Kroussou permit. The findings were taken with great enthusiasm while waiting for additional assessments.

The Australian company, Metals of Africa Ltd, released the findings of the assessment of the samples from Kroussou permit of (province of Ngounié) with a surface of 1,496 km2.

The Y-ray fluorescence analyses show a mineralization with high base metals content in various sections of the area of the permit. They reveal zinc and lead contents between respectively 3.58% to 35.01%, and 7.62% to 23.06%. The company is very happy with the particularly high levels of mineralization of the samples analyzed.

Metals of Africa Ltd shipped 60 additional samples to South Africa for further analyses. The findings of the new assessments are to be released next December.

The prospecting activities on the area of Kroussou permit and the first assessments go back to 1960 and 1982 respectively. Those activities were carried out by the France-based geological survey, Bureau de Recherches Géologiques et Minières.

INSTITUTIONAL NEWS

Biography of the new Minister of Mines: Mr. Christophe Akagha-Mba.

The Ministry of Mines, Industry and Tourism has a new man as leader. This is Mr. Christophe Akagha-Mba, who formerly assumed the function of Minister of Economy and Future Planning.

Mr. Christophe Akagha-Mba was appointed as Mines, Industry and Tourism in replacement of Mr. Régis Immongault Tatagani who is now the head of the Ministry of Economy, Promotion of Investments and Future Planning.

His curriculum vitae shows a long experience with the public administration. The functions he assumed include Minister of Economy and Future Planning, Chief Executive Officer of the Société Gabonaise d'Entreposage de Produits Pétroliers (SGEPP), Senior Attorney of the Paymaster General and Deputy Director of Revenue within the Treasury.

As regards studies, Mr. Akagha-Mba holds a post-master degree in Public Finances and Taxation from the University of Law, Economy and Social Sciences within Paris II Panthéon. He is an alumnus of the National School of Treasury Services (ENST in French) in Paris.

Moreover, the minister is a Commander of both the National Order of Merit and the Equatorial Star. He is an Officer of the Gabonese Order of Merit and has an award of merit from the National Gendarmerie. 

SEM NEWS

The Gabonese government transfers its holdings in COMILOG to the Société Equatoriale des Mines

The Gabonese government transfers all its shares in the COMILOG to the Société Equatoriale des Mines. This decision strengthens the position of the SEM as a strategic partner for the mining operators in Gabon.

In line with the Strategic Plan for an Emerging Gabon (PSGE, in French) and the creation of the Société Equatoriale des Mines, the Gabonese government transferred SEM all the shares (28.455) its owns in the Compagnie Minière de l'Ogooué (COMILOG), a joint-venture between the French group, ERAMET and the State.

"This decision is consistent with the strategy contained in the PSGE and designed by the President of the Republic, Head of State. Such strategy, which was reasserted during the last National Forum for the Industry, aims at boosting the mining sector. From now on, SEM, an organization under the technical supervision of the Ministry of Mines, will manage the shares of the government in the sector. This new configuration will allow the Ministry focusing on its main missions: design the mining policy, grant mining permits, promote, regulate and control the mining sector as well as implement the strategy for the processing of mineral resources." Mr. Regis Immongault, the Minister of Mines, Industry and Tourism, indicated.

SEM is a public limited company wholly owned by the Gabonese government. The PSGE assigns it with operational missions including owning and managing, on behalf of the government, its shares in mining companies and developing mining permits on its own or in partnership with operators.

This reorganization is aimed at reinforcing the role of the government, via the SEM, as the strategic partner of mining companies in the development of the Gabonese mining sector, in a view to increasing the contribution of the latter to the GDP at the same level as hydrocarbons. In 2013, their contributions stood at 6% and 46% respectively.

This is an objective defined within Gabon's National Strategy for Industrialization (SNI), which plans the economic diversification of the country. The SNI derives from the PSGE which is based on three pillars among which is the "Industrial Gabon".

Transferring these shares is a new step in the long-time partnership between the Gabonese government and ERAMET. "COMILOG is an example of the successful private-public partnership in a sector highly strategic. The objective of the SEM is to contribute to the development of COMILOG's activities, in an even more active manner. The transfer of the shares of government assigns the SEM to fulfill its missions defined as part of the Strategic Plan for an Emerging Gabon (PSGE, in French)." Fabrice Nze-Bekale, the CEO of the SEM, stated.

COMILOG announced the commissioning, on August 12, of the first plant in Moanda's Metallurgical Complex with a production capacity of 65,000 tons of silicomanganese per year. The second plant will be operational in January 2015 and produce 20,000 tons of metal manganese per year.

Another major development of the partnership between the Gabonese government and ERAMET is the construction, through a private-public partnership, of Moanda's School of Mines and Metallurgy in a view to meet the industry's demand for skills labor. The school will open in September 2015 and allow training advanced technicians and engineers.

Event: SEM attends the forum IPAD DRC.

SEM attended the 10th edition of the IPAD DRC forum organized in Kinshasa. The participation aimed at explaining the vision that drives the development of the Gabonese mining sector.

The Société Equatoriale des Mines (SEM) attended the 10th edition of the IPAD DRC forum which took place in Kinshasa (Democratic Republic of Congo) on last 21, 22 and 23 October.

The IPAD DRC forum allowed the delegates to discuss the issues around the creation of a business-friendly environment and the industrialization of the mining sector. Various panels were organized on the following subjects:"Good governance", "Methods of financing for mining projects", "Tax systems", "Development of transport infrastructure" and "Corporate Social Responsibility of operators".

During the discussions, the SEM presented the vision for the development of the Gabonese mining sector and its regulatory evolution with a new mining Code to be adopted soon.

Moreover, SEM could take cognizance of the mining economy innovations in the Democratic Republic of Congo and make contacts with various players of the sector in Africa.

During the IPAD DRC, awards were given to the local companies which distinguished themselves in environmental management, occupational health and safety, social investment and innovation.

The event was attended by various mining companies, representatives of African governments and service providers including energy groups, banks and legal firms.

Training at the center of the partnership between SEM and OCP

Training has a prominent place in the partnership between SEM and OCP on the project for the construction of the ammonium and fertilizer plant in Gabon.

The training courses that are being taken in Morocco by SEM's employees and young Gabonese are part of the academic and professional exchanges that go with the project for the Gabon-based fertilizer plant which is to be operational in 2018.

As regards the capacity building component, managers of Geology and Mining and the Comptoir Gabonais de Collecte de l'Or (CGCO) within SEM are taking a training program called OCP Executive Development Program, a program deriving from the cooperation between the OCP and SEM.

The program, which stretches over eight weeks, is composed of eight modules dealing with various subjects including macroreconomy, human resources management, performance management, sustainable development, industry, finance and international relations.

As for training, five young Gabonese were selected to attend a graduate course at the Industrial Management School of the Polytechnic University Mohammed VI in Morocco.

The students, who have all passed scientific baccalaureates, will attend a training course over five years. They are the first class of young Gabonese destined to join the technical managerial staff of the future fertilizer plant upon completion of their training.

They will be granted both a scholarship from OCP along with a monthly allowance paid by the Agence Nationale des Bourses et Stages (ANBG) over the duration of their curricula.

The partnership between SEM and OCP include technology, know-how and research and development transfers between Gabon and Morocco via the Polytechnic University Mohammed VI and its School of Industrial Management.

The memorandum of understanding for the development of a fertilizer production industry in Gabon was signed on March 6, 2014, under the auspices of the President of the Republic, His Excellency Ali Bongo Ondimba, and His Majesty King Mohammed VI.