During His inaugural speech November 3rd, 2011 as, president-elect of the Republic of Cameroon on the occasion of the swearing-in ceremony before the National Assembly, President Biya placed his new seven years mandate under the banner of “major accomplishments.” The Entrepreneur NewsOnline [TENO] caught up with Dr David Makongo President of Makongo & African Partners LLC who are Experts in Africa Mining and Oil and Gas Issues, to find out more on Cameroon's economic development strategies, especially the Mining Sector which the government expects to reap revenue to fund planned programmes:
The Entrepreneur NewsOnline [TENO]: Does this mean President Paul Biya will have to change the mining law and policy of Cameroon so in order to realize his “major accomplishments”?
David Makongo: In the1980s and 1990s most African nations reviewed their mining codes to benefit from globalization and privatization. Though Cameroon also hinted a possible review of the 1964 post-colonial mining code, this never happened till 2001. So, I will say Cameroon did not take immediate advantage of the wind of change that was blowing in Africa mining regimes so it stayed a step behind other African nations with equal mining potential.
That notwithstanding, it is important to mention that in the 1990s, Cameroon changed its mining policy to part ways with the old-fashioned nationalistic policy epitomized by the 1964 mining code in favor of a policy of privatization.
In my view, President Biya seems to have realized that in order to reduce unemployment and poverty in Cameroon he must opt out of his dream policy of “grand ambitions” in favor of a realistic policy of “major accomplishments.”
I therefore, do not see President Biya waiting until push comes to shove before shoving Law Nº 2001-1 of 16 April 2001regulating mining activities in Cameroon to take advantage of intense capital movement, globalization and privatization.
TENO: Has Cameroon benefited from the current mining law?
Makongo: Yes. No question that the belated revision of1964 mining code in 2001 was a landmark shift in the mining policy pendulum of Cameroon. That this was a step in the right direction is evidenced in the increased number of mining companies in Cameroon since 2001 and also the improved number of companies applying for mining concessions or inquiring about the mineral potential of Cameroon is eloquently testimony of the rightness of the decision that dealt away with the old nationalistic mining law. But there is still a lot more work to be done in this direction if the mining industry must help Cameroon’s emergence as an industrialized nation.
TENO: Where does the Cameroon mining law rank compared to other mining regimes in Africa?
Makongo: The 2001 Cameroon mining code is modern and in many ways demonstrates Cameroon’s willingness to eschew the past and embrace regulations that are very attractive and generous to foreign investors while at the same time producing jobs and promoting competition and transparency within the mining industry. This code stands tall amongst other African mining codes in terms of the different mining titles that can be awarded and also in terms of the government participation. Hence, mining investors must have Cameroon in their radar when drawing plans to invest in mining opportunities in Africa because the geology of Cameroon is not different from that of the auriferous Birimian greenstone belt of Ghana, Guinea, Burkina Faso, Niger and Mali and also because Cameroon is very peaceful.
TENO: Based on the 2001 mining law, will you advice any mining company to invest in the mining industry of Cameroon and why?
Makongo: Yes, I will highly recommend Cameroon to any company that wants to pump money into mining and there are too many reasons I will not hesitate to do so. As a summary, Cameroon now more than ever before, enjoys enormous peace and stability and presents potential investors with highly prospective opportunities for mining under a mining code that is extremely generous and friendly to every investor without discrimination. Here are some sound fundamentals of the 2001 Cameroon mining code:
TENO: Does the mining code guarantee exclusivity of mining titles?
Makongo: I will say yes. The 2001 mining code guarantees the exclusive right to mining area and mineral type: Multiple mining rights cannot be granted over the same grounds and the law guarantees the exclusivity of rights granted holders of a mining titles to operate within the confines of a geographical area to the exclusion of all other operators. This is not true with laws governing mining activities in some popular mining regimes like Ghana and Tanzania where the licensing authority may grant more than one mineral right over the same mining area.
TENO: Are there any ambiguities in the issuance of mineral titles?
Makongo: Not that I have deduced. The 2001 mining code brings clarity in the issuance of mining rights: The code is very clear in stating who the issuing authorities are for all kinds of mineral titles that could be acquired. For example, reconnaissance and prospecting permits are issued by the Minister in charge of mines and geology while mining permits are issued by decree of the President of the Republic upon the recommendations of the Minister in charge of Mines and Geology.
TENO: You mentioned earlier that you will recommend that companies invest in the mining industry of Cameroon based on the 2001 law. Can you point to any specific area of the law to justify your statement?
Makongo: Yes, there are many of such but let me first state some undeniable facts. The 2001 mining code is very generous with the validity period and size of permits granted. Considering that mining is an activity that requires time to raise huge sums of money necessary for execution of work commitments (exploration and exploitation);
Reconnaissance permit: the Cameroon mining code, under section 33 provides the validity period for reconnaissance permit to be one year renewable over a gigantic land area of 10,000 sq. km., (section 34).
Prospecting permit: Section 38 provides permit to be valid for an initial period of three years (renewable four times for two years each) and covering a total land area of 1000 sq. km as per section 39 of the law.
Mining permit: Section 48 provides that it shall be valid for a period of 25 years renewable for several periods of ten years until exhaustion of resources.
TENO: Are holders of such mining titles as just explained free to dispose of property under the law?
Makongo: Yes. The 2001 mining law also guarantees transferability of mineral titles: Holders of any kind of mining title in Cameroon are free to deal in their rights through assignment, transfers, security or pledge and approval of such dealing are automatic under the law where assignor and assignee are both in compliance with rules and regulations in force.
TENO: Are there any other guarantees?
Makongo: Yes, there any many interesting guarantees under the code. The 2001 Mining Code brings stability and guaranty of fiscal and legal conditions related to mining tenements and Cameroon accepts arbitration of business disputes as a member of the ICSID since signing the Convention September 23rd 1965.
Furthermore, the 2001 mining law guarantees the liberty to freely dispose of property, hire workers and chose service providers: Therefore, if a foreign company decides to wind-up, it is possible to freely dispose of its property under conditions dictated only by the market and not by government. Also guaranteed, are the freedom to hire and lay-off workers and to freely chose service suppliers and providers and the law assures free circulation of semi-finished and finished products within the national territory of Cameroon.
TENO: Many laws discriminate between local and foreign companies. Does the 2001 discriminate in favor of local enterprises involved in mining?
Makongo: No. The 2001 mining law does not discriminate between local and foreign companies or nationals: The provides that foreign companies and their representatives shall be represented under the same condition as companies and individuals of Cameroon in trade chambers and organizations responsible for the defense of professional and economic interests.
TENO: Despite all the good things you have said about the 2001 law, you suggested earlier that Cameroon needs to revise 2001 mining law. Why is it so important to do this?
Makongo: Today, most African countries are going back to the drawing board to revise their mining codes and mining agreements for already producing mines with one objective - raise more revenue. That is why it is not hard to conjecture from his slogan of “major accomplishments” that President Biya will not wait till push comes to shove before reviewing the 2001 mining code.
And if he does shove the 2001 law, it will be justified not only because of the need to raise revenue and attract more foreign investment, but also because Cameroon needs to build much needed infrastructure and put Cameroonian youth to work. It is also necessary to review the code in a bid to refurbish the old system of administration of mining activities in Cameroon and make it more adaptable to today’s global demands of the industry.
It is also imperative to review the mining code in such a way that will involve from the very onset other government services and stakeholders directly implicated in mining activities such as the forestry, lands, water and energy, finance, territorial administration, local communities, NGOs and holders of surface rights.
TENO: How soon do you think Cameroon should revise the 2001?
Makongo: I will say not until push comes to shove!