AMN - Equatorial Guinea makes mining progress – comment by Yolanda Torrisi

Mining is not generally associated with Equatorial Guinea but the government of the small central African country sandwiched between Gabon and Cameroon is doing its best to change that. Mining contracts have recently been signed with three international companies and the government is determined to see more companies follow.

Minister of Mines and Hydrocarbons HE Gabriel Mbaga Obiang Lima has signalled these intentions during the country’s Year of Investment, stating recently: “Mining is a key contributor to economic growth and jobs creation across West and Southern Africa, and we truly believe that it is time that Equatorial Guinea enters the race and starts developing its potential in minerals.”

“The development of this industry is central to the government’s economic diversification agenda and is expected to create thousands of jobs in the future,” he added.

Targeting US$1 billion dollars in FDI, the year-long initiative, led by the Ministry, advances the country’s agenda of energy cooperation and investment. It has been fortified by several contracts covering mineral resources along with further exploration and development investment in the oil & gas industry.

Contracts have been awarded to Manhattan Mining Investment Co, Blue Magnolia and Shefagold covering a range of minerals. Manhattan has been awarded a prospecting contract for gold in Block I while Blue Magnolia was awarded three prospecting contracts in Block B, Block K and Block H. The first of these covers the exploration of bauxite and precious metals, the second is for gold and the third for gold, uranium, iron, bauxite, basic metals and rare earth minerals.

One prospecting contract has gone to Shefagold in Blocks N and O for platinum, palladium, silver, chrome, copper, magnesium, phosphorus, iron ore and related minerals.

These milestone agreements follow Russia’s state-owned geological company Rosgeo signing the first contracts for the exploration of mineral and hydrocarbon resources in the country’s highly prospective Rio Muni basin. The two service contracts between the Ministry and JSC Zarubezhgeologia and JSC Yuzhmorgeologia, international subsidiaries of Rosgeo, provide for the initial phase of seismic acquisition in transit zone and state geological mapping of the basin. The former will be responsible for scouting works for state geological mapping, while the latter will spearhead scouting works for complex seismic acquisition in the transit zone of Rio Muni.

The Minister said: “This falls under the increasing cooperation between the Russian Federation and the Republic of Equatorial Guinea and will help in building a strong exploration base in the country. Such exploration activities will help in extending additional natural resources potential and reserves in Rio Muni, notably crude oil, natural gas and minerals."

Rosgeo CEO Sergei N Gorkov said: “Russian geologists formed the basis of Equatorial Guinea’s geological exploration industry back in the 1970s and we are delighted to be reviving this successful collaboration and bring in world-class geological activities to the Rio Muni area."

The contracts come after the country opened its mining sector to private investment for the first time last year aiming to attract a new wave of investment. The first area to be opened to exploration from both national and international companies is the Rio Muni Basin.

The contracts align with Equatorial Guinea’s 2020 Year of Investment initiative, which seeks to attract investment and promote key projects in its mining and minerals industry, including an industrial mining area with a gold refinery, to diversify the national economy, spur job growth, boost government revenues and stimulate local communities.

As part of the initiative, the Ministry of Mines and Hydrocarbons introduced a new measure that seeks to drive participation of the national workforce in the oil and gas industry and translate the country’s economic recovery into local job creation. Ministerial Order 1/2020 establishes the period by which companies can employ foreign labour in the oil and gas sector as three years.

While the country continues to seek foreign direct investment in several of its capital-intensive energy projects through the Year of Investment campaign, the government is simultaneously prioritising the procurement of local goods and services and the stimulation of local jobs.

Further energy industry progress is certain to be made when the country hosts the Africa Oil & Investment Forum & Exhibition in Malabo on November 25-26, 2020, which will unite local, regional and international companies to sign up and present projects for development. This event will also enable the country to increase its focus on downstream value-adding, particularly in oil & gas.

Lima said: “Downstream is the future of our industry. It is king. It will create jobs and enable us to use the entirety of our entire resources to be processed in-country.”

Yolanda Torrisi is Chairperson of The African Mining Network and comments on African mining issues and the growing global interest in the continent. Contact:yolanda@yolandatorrisi.com