Libreville, May 28 2014- 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 leader for discussions on the major issues related to the mining sector in Africa and in Gabon.
SEM is organizing 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 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 respectively.
The discussions during the plenary session which is to be chaired by Mr. Cheikh Ibrahima Diong, CEO of Africa Consulting & Trading, will be about the issues of the creation of skills, the establishment of regulations and the promotion of good governance and transparency in front of the issue of the local processing of mining resources.
Participants: Mr. Günter Nooker, German Chancellor’s G9 Personal Representative for Africa, Mr. Fabrice Nze-Bekale, CEO of Société Equatoriale des Mines (SEM), Mrs. Zouera Youssoufou, World Bank Resident Representative in Gabon, Mr. Mike Elliott, Representative of Global Leader Mining and Metal EY and Mr. Ebenezer Essoka, Vice President Africa Standard Chartered Bank (South Africa).
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 to guarantee their operations’ success, the supervision of rural populations’ activities and their integration in the formal economy and the access to international markets.
As part of this workshop, which is to be chaired by Mrs. Kristine Ngiriye, CEO of Performances Central Africa, participants will be discussing 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.
Participants: 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, Mr. Tafsir Camara, Corporate Secretary of Société Equatoriale des Mines and Mrs. Rosalind Kainyah, former CEO of Debeers USA and former administrator of Tullow Oil.
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, which is to be chaired by Mr. Fabrice Nze- Bekale, CEO of Société Equatoriale des Mines, will focus 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 will also allow depicting PPPs in Gabon.
Participants: Mr. Pietro AMICO, ERAMET’s representative in Gabon (for the Mining sector), Mr. Gagan GUPTA, OLAM Gabon’s CEO (for the Agriculture sector), Mr. Himmunt JUGDUHT, representing Tropical Holding (for the Fishing sector), Mr. Yair GAON, Falcon Eye’s CEO and Telemania’s CEO (for the Energy and Infrastructures sector).
Mines: a high potential sector
In Gabon, the mining sector contributes to 4% of the GDP PIB, 6% of exports and accounts for 1,3% of budget revenues. These relatively low figures contrast with the potential of the Gabonese subsoil of which only 30% was explored, By 2025, the government is expecting a contribution of the mining sector to GDP up to XAF3,350 billion (around USD7 billion) to the same extent as the oil sector, the current first contributor to GDP (49%).
Gabon has around 250 million tons of known reserves, in addition to be the world’s fourth producer manganese. The Nationale Strategy for Industrialization targets 20% and 35% of local processing of the manganese output in 2016 and 2025 respectively with the aim of multiplying by three the local added value by 2025.
COMILOG, of which the government possess 28,9% of shares, built Moanda’s Metallurgical Complex (MMC) which will be completely operational in September 2014 and will include a silicomanganese plant with a capacity of 65,000 tons per year as well as a metal manganese plant with a capacity of 20,000 tons per year. This project is expected to create 500 jobs.
The world-class deposit of Bélinga (province of Ogooué-Ivindo) which reserves are estimated at 1 billion tons is the second major iron reserve in Africa. In December
2013, the government bought the deposit back from China Machinery Engineering Corporation. The project was almost blocked since 2007.
Mabounié’s mining project in the (province of Moyen-Ogooué) constitutes a world- class potential as regards rare metals: 5% of world’s reserves, including 30% of niobium reserves, 10% of tantalum, rare earths, uranium and phosphates. Eramet- Comilog is planning to launch the construction of a plant in 2015 which will allow the development of an additional major mining center in Gabon.
Regulation: a new mining Code to come
Gabon is about to adopt a new mining Code which will address investors expectations as well as concerns regarding the protection of the environment and corporate responsibility.
This new regulatory framework, in replacement of that of the 2000 mining Code, provides with tax incentives, a simpler procedure for the granting of exploration permits, a rational management of mining resources and the establishment of a mining cadastre.
According to the Minister of Industry, Mines and Tourism, Mr. Régis Immongault Tatagani, “the new mining Code is a real toll for the modernization of the mining sector since it will provide with a regulatory framework, which will be more attractive and adapted to the challenges faces in a highly competitive environment. This framework will allow conciliating the mining operators’ interests, social and corporate responsibility, the protection of the environment and sustainable development as well as the involvement of Gabonese SMEs in subcontracting.”
The law, which was submitted to Parliament in October 2013, should come into effect in 2014.
SEM: context of its creation and missions
Created on August 24 2011 by the presidential decree No. 1018/PR/MMPH, SEM is a state-owned company with a private-company management. It is then a public limited company with a board of directors and an executive board. It is under the management of the Presidency of the Republic and operates under the technical supervision of the Ministry of Mines.
The creation of the Société Equatoriale des Mines is in line with the government’s ambition to upgrade, at the very best, Gabon’s natural resources through the development of its mineral potential and maximize the proceeds of the development of natural resources through an efficient management of the government’s investments in the mining industry.
SEM’s main mission is to improve the Gabonese people’s life by making them benefit, in total transparency and fairness, from the responsible development of the mineral resources which abound in their subsoil.
Active on the entire value chain of the mining sector, SEM is in charge of the management of the government’s investments in mining companies, the exploration and promotion of Gabon’s mining area, the development and exploitation of mining rights in Gabon and abroad, on its own or in partnership, the promotion of the local processing of the ores mined, the marketing of the ores mined and the support to the mining industry’s players.
Projects: gold, marble, sand and aggregates
As regards gold, SEM created the Comptoir Gabonais de Collecte de l’Or (CGCO) which mission is to undertake the collection of gold from artisanal gold miners and, thus, combat illegal gold mining on the national territory.
In 2013, CGCO collected 43 kg of gold at its buying centers based in Makokou (Ogooué-Ivindo) and Ndjolé (Moyen-Ogooué). This output exceeded the objective of 25 kg set by the government for the same year. Additional buying centers will soon be established in Mouila (province of Ngounié), Mitzic (Woleu-Ntem) and Lastourville (Ogooué-Lolo).
In addition to the objective of supervising and incorporating artisanal gold miners’ activities in the formal economy, this project of gold collection also involves professional and social aspects. It plans to train artisanal gold miners to innovative techniques which will allow them maximizing their output and protecting the environment as well as form cooperatives for a better organization of artisanal miners. On the social side, CGCO’s action provides them with constant income enabling them to meet their families’ needs. This project contributes to combating poverty in rural areas.
Besides, SEM holds prospection and research permits in 3 zones: Ogooué-Ivindo, Ogooué-Lolo and Moyen-Ogooué. In the medium term, SEM is also planning to build a smelter in Libreville.
As for marble, SEM intends to resume the exploitation of the quarry based in Dousseoussou (Ngounié) and, from 2015, build a marble cutting plant. This facility will supply local and foreign markets.
Moreover, SEM is about to finalize a market survey on a sand quarry in the province Estuaire. It also started prospecting aggregates in a quarry located in the same province.
SEM’s CEO points out that “these are encouraging projects which require technical and financial support. SEM is planning to engage in sound and mutually beneficial partnerships with international investors with proven financial capacity and operational experience. We have started seeking partners and the participation of SEM in the New York Forum Africa and other major mining meeting pertains to this endeavor.”
SEM’s four strategic objectives
Gold: SEM is planning to develop its project for the collection of artisanal conducted by its subsidiary, Comptoir Gabonais de Collecte d’Or. In addition, it intends to build a smelter in Libreville and become an operator and conduct exploration works in three areas nationwide.
Iron: SEM is actively seeking investors with the intention of developing the Gabon’s high iron ore potential. The company is involved in the project for the development the world-class deposit based in Bélinga.
Manganese: along with COMILOG, one of the world’s leading producers of the ore, SEM, on behalf of the government, is a shareholder in NoGa Mining. The company is seeking to attract investors in order to develop additional iron deposit in the nationwide.
• Marble: Resume quarrying and undertake the construction of a marble factory.
• Sand and aggregates: meet the high demand from the public works sector which is part of the Strategic Plan for an Emerging Gabon.
PANELS & QUOTES
Plenary session: “100% local processing of mining resources: how can we achieve such goal?”
CEO of Société Equatoriale des Mines (SEM)
About comparative advantage : « Our goal to transform mineral ressources locally in order to bring comparative advantage and we promote partnerships with foreign investors to develop our capacities (labour skils). This is line with the Strategic Plan for an Emerging Gabon. »
Mr. Mike Elliott
Representative of Global Leader Mining and Metal EY
About comparative advantage : « Capital is mobile and will always go where it’s cheaper. » saud Mr. Elliot.
Mr. Ellio added « Downstream processing is important but we need to bare in mind where we want to go (final goal). Putting policy can bring contradictions. Comparative advantage is key and cheap labour is key.»
Mrs. Zouera Youssoufou
World Bank Resident Representative in Gabon
About comparative advantage : « We need to train people (skilled labour). At the World Bank, we help countries identifying their needs in order to find where comparative advantage is. We provide technical assistance to countries in mining sector to this end. » mentioned Mrs. Youssoufou.
Mrs. Youssoufou believes that it is crucial to see how a countries should position themselves in terms of comparatitive advantage.
Mr. Ebenezer Essoka
Vice President Africa Standard Chartered Bank (South Africa)
« Creating a good environment iskey and the follonwing acpects need to be taken into account : tax concession, labour legislation , environmental concerns. »
Mr. Essika refers to Botswana case.
Mr. Günter Nooker
German Chancellor’s G9 Personal Representative for Africa
« We are intesred in africa’s natural resources and there is no hidden agenda.We have a realistic approch to deal with expections. We are also regarding on environmental and social issues »
He added that Germany will launch a specific programme to develop mining capacities of countries.
Workshop : “The role of national mining companies as drivers of the development of the mining sector in their countries”
Mr. Christian Mion
Mining and Metals Advisory Leader, EMEA, EY (France)
About illegal gold exploitation : Mr. Mion focused on assistance to gold miners
« Government through state-owned companies need to create cooperative of gold miners and provide permits to them. » affirmed Mr. Mion.
Mr. Mion believes that transparency is key in fighting against illegal exploitation of gold. He refers to Katanga (DRC) where cooperatives were created.
Mr. Tafsir Camara
Corporate Secretary of Société Equatoriale des Mines
About illegal gold exploitation : « It will be even more difficult to make traceability of mineral resources more effective in the upcoming years . That’s why we need to develop a holistic approach that takes into account major issues such as poverty to fight against it. efficiently. » said Mr. Camara.
Mr. Camara added that local transformation is key at it provides income to more people in rural areas and also that with more experience in the field, state-owned companies can rapidly a positive impact as he referred to the SEM and its gold project.
Mrs. Amina Benkhadra
Director General, Office National des Hydrocarbures et des Mines (Morocco)
About states’interests : « International financial institutions should bare in mind that state-owned companies defend states’interests and that local transformation is key » said Mrs. Benkhadra.
Mrs. Rosalind Kainya
former CEO of Debeers USA and former administrator of Tullow Oil
About Joint-ventures :« About JV model helps creating and improving skills imorvement as well as it facilitates access to technology. » said Mrs. Kainyah. ».
ABOUT THE SEM
Created on August 24 2011 by the presidential decree No. 1018/PR/MMPH, SEM is a state-owned company with a private-company management. It is therefore a public limited company with a board of directors and an executive board. It is under the management of the Presidency of the Republic and operates under the technical supervision of the Ministry of Mines. SEM’s main mission is to improve the Gabonese people’s life by making them benefit, in total transparency and fairness, from the sustainable development of the mineral resources which abound in their underground. Active on the entire value chain of the mining sector, SEM is in charge of :
• the management of the government’s investments in mining companies.
• the exploration and promotion of Gabon’s mining area.
• the development and exploitation of mining rights in Gabon and abroad, on its own or in partnership.
• the promotion of the local processing of the ores mined.
• the marketing of the ores mined.
• the support to the mining industry’s players.
In order to carry out our tasks, we believe in the establishment of sound and mutually beneficial partnerships with the others players from the mining industry through a global approach.