Cameroon mining sector is evolving

Oil still the main contributor to the state budget.

Reforms in the mining sector aim to improve its contribution to the country’s economy while providing a better framework for artisanal mining.

The 2012 EITI Report shows that revenues from the extractive sector stayed at around US $1.5 billion in 2012, 31% of the State’s budget. Those revenues came mainly from the oil sector (over 97%).

Potential of the mining sector: exploration activity and reforms

While revenue from the mining sector has remained at a relatively low level (less than 1% of the state budget at US $1.8 million) it could significantly increase in coming years, according to the report. Exploration activities dating back to 2009 have revealed potential bauxite deposits of over 700 million tons. This could allow for an annual alumina production of 3.5 million tons and 30% of Cameroon exports in the medium term.  The World Bank is providing support to strengthen local and regional integration of mining activities.

Cameroon has also adhered to the Kimberley process in order to guarantee better transparency in diamond mining.

Evolution of artisanal mining

The artisanal sector is the largest employers within the mining sector.

The goal of the Cadre d’Appui à l’Artisanat Minier (CAPAM) – a division of the Mining ministry – is to channel  Cameroon’s artisanal mining production (mainly gold and diamonds) into the formal sector. A decree from August 2014 enables CAPAM to levy a direct tax of 15% on “small mechanized artisanal mining production”.

Mixed outlook for the oil sector

In 2012, the Société Nationale des Hydrocarbures (SNH) announced it intended to invest US $1 billion in oil exploration and production. The 2012 production level of 63,000 barrels a day could increase to 90,000 barrels a day in the coming years. Indeed figures for the first nine months of 2014 show a increase to 84,000 barrels a day.

In addition, Cameroon signed a bilateral agreement with Niger in October 2013, to transport Nigerien oil through the Chad-Cameroon pipeline. The transit fee for Chadian oil more than tripled from US 41c  a barrel to US $1.30 a barrel as a result of the agreement.

Better communication needed between different stakeholders

Data about the extractive sector exists in Cameroon.  What is needed now is to communicate it more effectively to the general public. The Report recommends that the Ministry of Mines produce regular reports on production and revenue. It also recommends an updated oil and mining cadastre that would publish information on the companies.

 

For more information about EITI in Cameroon, visit their website at www.eiticameroon.org or the country page on eiti.org.