Mining in the Republic of Congo
|Mining in the Republic of Congo|
Position of Republic of Congo within Africa highlighted
|Country||Republic of Congo|
|Authority||Ministry of Mines and Geology|
Oil and Gas dominates the Republic of the Congo (French: République du Congo), also referred to as Congo-Brazzaville, resource sector, with the petroleum industry accounting for 89% of the country’s exports in 2010. Among African crude oil producers in 2010, The Congo ranked seventh. Nearly all of the country's hydrocarbons were produced off-shore. The Minerals sector is administered by the Department of Mines and Geology. Presently no major mining activities are conducted, with some small-scale domestic operations. However, the country has numerous large scale undeveloped resources. The country has recently attracted a strong influx of international companies seeking to tap into the vast mineral wealth.
As of 2012,mining statistics were as follows:
- 32 prospecting licenses granted to 28 companies
- 42 exploration licenses granted to 26 companies
- 7 mining licenses granted to companies
|Iron Ore||Mayoko||Congo Mining Ltd|
|Badondo||Congo Mining Ltd|
|Oyabi||Equamineral Holdings Ltd|
|Gold||Mousondji||Compagnie Minière du Chaillu|
During the colonial period, the Republic of Congo saw small scale mechanized mining activities. During the 60s French exploration companies inditified vast evaporative zones containing slyvinite and Carnallite mineralisation covering the Congo Basin.
In 1959 COMILOG commenced mining manganese near the town of Moanda, in Gabon a short distance for the Congolese border. To allow for export, a 285 km railway line was constructed from the Congo town of Mbinda, south where in joins to the Congo-Ocean railway and ultimately on to port of Pointe Noire. Although manganese is no longer railed, the COMILOG-line remains in use carrying a weekly passenger service. Conveniently, the Comilog-line runs through Mayoko and the nearby high grade iron ore resources, expediting the development of these deposits.
From independence (1960) to 1985 the mining sector experienced industrial expansion that was limited to the potash company, Makolo (ex-Holle) and the polymetals of Mfouati, Boko-Songho and Mindouli. Artisanal mining was limited to the exploitation of precious stones, notably gold in Kelle, Kakamoeka, Mayoko and in Souanké.
However, oil production intensified for the period 1975 to 1984, leading to a large increase in government revenue. This brought about profound changes in the structure of domestic output and exports.
During the period 1985 to 1999, the Congo became structurally indebted as it struggled with political and economic difficulty despite the significant inflow of oil revenue. International investment slowed and the mining industry virtually ceased. By 2000, gold and lime remained the only minerals extracted.
During this period the government started to show a genuine commitment to developing and mining sector and is a central part of the country’s economic diversification program – Le Chemin d’Avenir (Path Forward).
In the past, the mining sector has been rife for corruption, which led to a suspension in 2004 of the ROC from the Kimberly Process. However, corruption has significantly been reduced and ROC was later reinstated to the Kimberly Process following improvements in monitoring the mining sector.
In 2005, the government introduced a new mining code replacing the existing out-dated legislation. The mining code offers prospective miners attractive terms and flexible terms to encourage the development of mining projects.
To support the economic diversification strategy, the government has created four special economic zones. Including the Pointe-Noire Special Economic Zone, located the coast at Point Indienne, in support of developing petrochemical, iron and steel, and mining activities.
In 2008 the Bureau d’Expertise, d’Evaluation et de Certification des Substances Minérales Précieuses (Bureau for Assay, Evaluation and Certification of Precious Minerals) was established with the aim of facilitating control over the scattered artisanal alluvial diamond extraction operations.
The current President, Sassou has repeatedly stated he wants to build a lucrative mining industry unlike that of the neighboring DRC with is plagued by corruption and mismanagement.
Canadian exploration company NGEx Resources Inc was granted two exploration licences, for Copper-Lead-Zinc, over the Reneville and Kingouala areas, in Early 2010.
Hanlong initiated a bid for Sundance Resources in July 2012. The bid initially valued Sundance at US$1.5b but was later revised to US$1.3B. Sundance's main asset is the Nabeba iron ore deposit, which forms part of the Mbalam Project together with the Mbaraga deposit in neighbouring Cameroon. In February NDRC extended the provisional approval of the bid to July 2013. On 8 April Sundance announced the termination of the takeover after Hanlong failed to meet the funding conditions.
In December 2011, the Ministry of Mining and Geology was invited to Mines and Money Conference, London, to receive second place in the "Country of the Year" prize, after Liberia.
In January of the next year, Exxaro made a US$349 million takeover offer for African Iron.
In December 2012, the Ministrial Council approved the recommendation by the ministry for mines to grant the Nabeba Mining Permit.
Despite challenges, the Republic of Congo retains its strong economic growth with enormous investment potential. The country has considerable and varied natural resource wealth, a strategic location with an ISPS-certified port and a capital city across the river from the enormous DRC market, and a relative dearth of competition. The Government is eager to support international investment and is also now largely debt-free.
As at 2012, 7 mining permits have been granted:
- A potash permit to MAG MINERALS Potasse du Congo (MPC) in the Pointe Noire zone (Mengo);
- Two polymetal mining permits to the company SOREMI, in BokoSongho and Yanga-Koubenza in the Mfouati/BokoSongho zone
- Two polymetal mining permits in Mindouli-Mpassa to the company LULU.
- Two iron or mining permits, one to Core's Avima deposit and the other to Nebaba held by Sundance
Precambrian rocks of the Archean to Neoproterozoic Age form the central part of the Republic of Congo, overlain by continental Cretaceous and Tertiary Sediments. The East is made up of Quaternary alluvial sedimentation. The Coastal basin is made up of Cretaceous to Quaternary marine sediments, including phosphatic sequences and evaporites. The Precambrian Mayombe Range boards the basin to the East. The Neoproterozoic West Congolian Supergroup occurs in the Nyanga syncline with feldspathic sediments overlain by dolomites, cherts and dolomitic limestone with stromatolites.
Alluvial diamonds have been found close to the Central African Republic border.
A giant granitoid massif known as the Cahillu Massif extends with NS foliation through the Southern Central Congo. At Mayoko a relict greenstone belt occurs, with sub-verticl banded iron-formation. Two large high iron deposits have been located, Mayoko-Moussondji (Congo Mining) and Mayoko-Lekoumou (Exxaro). Iron is hosted within 'Chapeau de Fer' or hats of iron, a highl weathered iron-rich metamorphic rocks. With parts cover by high grade Hematite crust.
Iron Ore has also been discovered in the northwestern part of the Archaean Congo Craton (Sangha region), within the Chaillu Block. This is a metamorphosed complex of Tonalite- Trondhjemite-Granite gneisses in which linear belts of metavolcaniclastic rocks and BIF occur.
In April 2005, Republic of Congo introduced a new Mining Code under Law4-2005. The new mining code offers attractive terms and establishes a clear regime from exploration and exploitation agreements. The mining code allows foreign entities to control mining operations. This represented the first major overhaul to the mining code since 1965.
The mining code also gives, upon granting a mining licence, the Congolese state a 10% non-contributing stake in all mining projects. The government has the right to purchase additional equity, but to date as not yet excised this right.
Royalties and taxes
Royalties are calculated on the export value of the resource based on the following schedule.
- Ferrous and non-ferrous metals (including phosphate) taxed at 3%
- Precious metals and stones taxed at 5%
- Mineral and thermal waters taxed at 1%
Company profit taxes
- 20% for Quarry Operations
- 30% for Mining operations
Article 98 of the Mining Code requires the State and the holder of an Exploitation Licence to enter into a Mining Agreement (“Convention”), which clearly establishes the rights and obligations of each party, and grants concessions such as tax-free periods. Once an Exploitation Licence for the Project has been granted and following negotiation and cooperation of advisers, the Licence holder and the “State, represented by its Government, will agree the terms of the Convention. The terms of the Convention typically require the State to:
- undertake, as soon as possible after signing of the Convention, to submit the Convention to the Congolese Parliament for ratification and adoption as a State Law (“Ratification Law”);
- commit to having the Ratification Law adopted by the Congolese Parliament as soon as possible and no later than three months from the date of its presentation to Parliament.
Oil and gas
In the late 1970s, Congo emerged as a significant oil producer, with production expanding considerably during the 1990s. However, by the turn of the century, production began to decline as existing oil fields reached maturity, in 2001. However, since 2008 oil production has increased every year as a result of several new projects coming online, mainly Congo’s first deep-water field Moho-Bilondo. The Congo is the fifth largest oil producer in sub-Saharan Africa.
According to the 2012 BP Statistical Energy Survey, Congo had proved oil reserves of 1.94 billion barrels at the end of 2011, equivalent to 17.9 years of current production and 0.11% of the world's reserves. The accompanying downstream oil industry is an important element in the country's economy. The oil industry is predominantly run by foreign companies and is centred on the coastal city of Pointe Noire where the Congolaise de Raffinage (Coraf) operates the 21,000 bpd Pointe Noire refinery. The refinery has been out of commission for four years and has only recently started operating again.
Congo holds the fifth-largest proved reserves of natural gas in the Sub-Saharan Africa, at 3.2 Tcf, A majority of natural gas around 65% is reinjected and 21% flared.
|Wikimedia Commons has media related to Mining_in_the_Republic_of_the_Congo.|
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