Cameroon signs bauxite deal with Canyon Resources

Canyon Resources

30/07/2024 21:04

By Amindeh Blaise Atabong
       YAOUNDE, July 30 (Reuters) - Cameroon on Tuesday signed
a bauxite mining deal worth at least $2 billion with a
subsidiary of Australia-based Canyon Resources  CAY.AX , as the
central African nation seeks to become an upper middle-income
country by 2035.
    Camalco, the Cameroonian subsidiary of the Australian miner,
will carry out the direct shipping ore (DSO) project at the
Minim-Martap mine in northern Cameroon, covering an area of
nearly 500 square km (123,550 acres).
    "We have finally been able to bring the long  awaited , old
Minim-Martap, which was known theoretically, into fruition," Fuh
Calistus Gentry, Cameroon's interim mines minister, said at the
signing event. 
    According to an initial 20-year agreement, Camalco will work
on the Beatrice, Raymonde and Danielle plateaux in the north of
the country to mine 99.1 million metric tons of proven reserves
of bauxite, with 51.6% alumina and 2.4% silica. 
    The high-grade, low contaminant bauxite deposit is suitable
for industrial production at a rate of around 5 million tons of
bauxite ore annually over a period of 20 years. 
    Camalco will process bauxite into alumina and transport it 
via an existing railway line through the cities of Ngaoundere,
Yaounde and Douala to the Port of Douala or the ore terminal at
the Port of Kribi for export.
    It will build the mine and other mining facilities to be
used during the actual mining operation, as well as road
infrastructure from the extraction site to the rail loading
station. It will also invest in rehabilitating the existing
railway network. 
    The mining company will also build an energy production
unit, a unit to process bauxite into alumina, and dedicated port
facilities.
    Singapore-based Eagle Eye Asset Holdings (EEA) is helping
fund the project after signing a subscription agreement with
Canyon Resources last year. 
    Rana Pratap Singh, director general of Camalco, said the
deal marks a very important milestone in the process of
converting the concession into a mining permit.
    "Once we have this mining permit, then all our activities
will take pace with much more confidence from investors," he
told reporters at the signing, adding that serious mining
operations could begin in two years' time.  
    Under the deal, the Cameroonian government will own 10% of
all bauxite extracted. It will also receive state concession
fees and ad valorem tax, while the mining company will pay
royalties to local communities.
    The project will generate at least 1,000 direct jobs from
the first year of production and significantly contribute to the
national economy, the interim mines minister said.
    The mining code stipulates that 15% of the raw material
extracted must be supplied to the local market.

 (Editing by Portia Crowe and Marguerita Choy)
 ((AmindehBlaise.Atabong@thomsonreuters.com; +237674875987;))