Mining in the Republic of the Congo
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Oil and gas dominate the extraction industries of the
Republic of the Congo The Republic of the Congo (french: République du Congo, ln, Republíki ya Kongó), also known as Congo-Brazzaville, the Congo Republic or simply either Congo or the Congo, is a country located in the western coast of Central Africa to the w ...
(french: République du Congo), also referred to as Congo-Brazzaville. The petroleum industry accounted 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 underway, although there are some small-scale domestic operations. However, the country does have 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: *32 prospecting licenses granted to 28 companies *42 exploration licenses granted to 26 companies *7 mining licenses granted to companies


Natural resources


History


Colonial

During the colonial period, the Republic of the Congo saw small-scale mechanized mining activities. During the 1960s French exploration companies identified vast evaporative zones containing
sylvinite Sylvinite is a sedimentary rock made of a mechanical mixture of the minerals sylvite (KCl, or potassium chloride) and halite (NaCl, or sodium chloride).Weiss N.L., SME Mineral Processing Handbook 1985, Page 22-2 Sylvinite is the most important s ...
and
carnallite Carnallite (also carnalite) is an evaporite mineral, a hydrated potassium magnesium chloride with formula KMgCl3·6(H2O). It is variably colored yellow to white, reddish, and sometimes colorless or blue. It is usually massive to fibrous with rare ...
mineralisation covering the
Congo Basin The Congo Basin (french: Bassin du Congo) is the sedimentary basin of the Congo River. The Congo Basin is located in Central Africa, in a region known as west equatorial Africa. The Congo Basin region is sometimes known simply as the Congo. It con ...
. In 1959 COMILOG commenced
manganese Manganese is a chemical element with the symbol Mn and atomic number 25. It is a hard, brittle, silvery metal, often found in minerals in combination with iron. Manganese is a transition metal with a multifaceted array of industrial alloy use ...
extraction operations near the town of
Moanda Moanda is one of the largest towns in Gabon, lying on the N3 road in Haut Ogooué. It is also one of the most important manganese mining towns in the world, under the auspices of the ''Compagnie Minière de l'Ogooué'' (COMILOG), which began ...
in
Gabon Gabon (; ; snq, Ngabu), officially the Gabonese Republic (french: République gabonaise), is a country on the west coast of Central Africa. Located on the equator, it is bordered by Equatorial Guinea to the northwest, Cameroon to the north ...
, just across the Congolese border. To be able to export the manganese COMILOG built a 285 km railway line from the Congo town of
Mbinda Mbinda is a town in the Republic of Congo, lying on the border with Gabon. It is a transport hub and lies at the end of a railway line to Brazzaville. Overview The town prospered as the southern end of the 75 km COMILOG Cableway from Mo ...
south to where it join the Congo-Ocean Railway. Ultimately trains go on to the coastal port of
Pointe Noire Pointe-Noire (; kg, Njinji, french: Ndjindji with the letter d following French spelling standards) is the second largest city in the Republic of the Congo, following the capital of Brazzaville, and an autonomous department since 2004. Before ...
. Although manganese is no longer moved by rail, the COMILOG line remains in use, with weekly passenger service. Conveniently, the COMIL line runs through
Mayoko Mayoko District is a district in the Niari Department of Republic of the Congo. The capital lies at Mayoko. It has a northern border with Gabon. As of 2007, the population is 5,147. Transport Mayoko is served by a branch railway of the Con ...
near the high-grade
iron ore Iron ores are rocks and minerals from which metallic iron can be economically extracted. The ores are usually rich in iron oxides and vary in color from dark grey, bright yellow, or deep purple to rusty red. The iron is usually found in the fo ...
, which any mining syndicate that might want to set up new commercial operations would surely find convenient.


1960-1985

From independence (1960) to 1985 industrial expansion in the mining sector was limited to the
potash Potash () includes various mined and manufactured salts that contain potassium in water-soluble form.
company, Makolo (previously Holle) and the
polymetal In chemistry or mining, polymetal or polymetallic is a substance composed of a combination of different metals. When the substance contains only two metals the term ''bimetal'' (''bimetallic'') is sometimes preferred. A (or ') is an ore that is ...
s of Mfouati District,
Boko-Songho District Boko-Songho is a district in the Bouenza Region of southern Republic of the Congo. The capital lies at Boko-Songho. Towns and villages The villages of Boko-Songho district are: Minga, Hidi, Mankala, Nzangui, Kinzambi (Tipheret), Kabadissou, Ma ...
and
Mindouli Mindouli is one of two towns in the Republic of Congo with this name. This is the one in the Pool Department. It is very close to the border with the Democratic Republic of the Congo. Transport Mindoulu is served by a station on the main line ...
.
Artisanal mining An artisanal miner or small-scale miner (ASM) is a subsistence miner who is not officially employed by a mining company, but works independently, mining minerals using their own resources, usually by hand. Small-scale mining includes enterprises ...
was confined to exploitation of
precious metals Precious metals are rare, naturally occurring metallic chemical elements of high economic value. Chemically, the precious metals tend to be less reactive than most elements (see noble metal). They are usually ductile and have a high lustre. ...
, notably gold in Kellé,
Kakamoeka District Kakamoeka (can also be written as ''Nkakamueka'', ''Nkakamweka'', ''Nkaakamueeka'' or ''Nkaakamweeka'') is a district in the Kouilou Region of far south-western Republic of the Congo The Republic of the Congo (french: République du Congo, ...
,
Mayoko District Mayoko District is a district in the Niari Department of Republic of the Congo. The capital lies at Mayoko. It has a northern border with Gabon. As of 2007, the population is 5,147. Transport Mayoko is served by a branch railway of the Congo ...
and in Souanké.
Oil production Petroleum is a fossil fuel that can be drawn from beneath the earth's surface. Reservoirs of petroleum was formed through the mixture of plants, algae, and sediments in shallow seas under high pressure. Petroleum is mostly recovered from oil dri ...
intensified during its boom period, 1975 to 1984, leading to a large increase in government
revenue In accounting, revenue is the total amount of income generated by the sale of goods and services related to the primary operations of the business. Commercial revenue may also be referred to as sales or as turnover. Some companies receive reven ...
. This increase in revenue brought about profound changes in the structure of exports and domestic output.


1985-1999

From 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 mining virtually ceased. By 2000, gold and lime were the only minerals still being extracted.


2000 onwards

In 2000 the government began to show a genuine commitment to developing a mining sector, and it 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 with
corruption Corruption is a form of dishonesty or a criminal offense which is undertaken by a person or an organization which is entrusted in a position of authority, in order to acquire illicit benefits or abuse power for one's personal gain. Corruption m ...
, which led to a suspension in 2004 of the RoC from the Kimberly Process. However, corruption has been significantly reduced and the ROC was later reinstated to the Kimberly Process after it made improvements in monitoring procedures for its mining sector. In 2005, the government introduced a new mining code, to replace existing outdated legislation. The mining code offers prospective miners attractive and flexible terms to encourage the development of mining projects. To support the economic diversification strategy, the government created four special economic zones, including the Pointe-Noire Special Economic Zone, located on 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. Sassou, the current president, has repeatedly stated he wants to build a lucrative mining industry, unlike that of the neighboring DRC, which is plagued by corruption and mismanagement. After the September 2009 elections the government formed the new Ministry of Mines and Geology, Ministère des Mines et de la Géologie, with
Pierre Oba Pierre Oba (born 17 July 1953) is a Congolese security official who has served in the government of Congo-Brazzaville as Minister of Mines since 2005. During the 1980s, he served successively as Director of Presidential Security and as Director- ...
as Minister. In early 2010, the Canadian exploration company NGEx Resources Inc was granted two exploration licences for copper-lead-zinc, over the Reneville and Kingouala areas. Hanlong initiated a bid for Sundance Resources in July 2012. The bid initially valued Sundance at US$1.5 billion but was later revised to US$1.3 billion. Sundance's main asset is the Nabeba
iron ore Iron ores are rocks and minerals from which metallic iron can be economically extracted. The ores are usually rich in iron oxides and vary in color from dark grey, bright yellow, or deep purple to rusty red. The iron is usually found in the fo ...
deposit, part of the Mbalam Project together with the Mbaraga deposit in neighbouring
Cameroon Cameroon (; french: Cameroun, ff, Kamerun), officially the Republic of Cameroon (french: République du Cameroun, links=no), is a country in west-central Africa. It is bordered by Nigeria to the west and north; Chad to the northeast; the C ...
. In February the
National Development and Reform Commission The National Development and Reform Commission of the People's Republic of China (NDRC), formerly State Planning Commission and State Development Planning Commission, is a macroeconomic management agency under the State Council, which has br ...
of the People's Republic of China (NDRC) extended provisional approval of the bid to July 2013. On 8 April Sundance announced termination of the
takeover In business, a takeover is the purchase of one company (the ''target'') by another (the ''acquirer'' or ''bidder''). In the UK, the term refers to the acquisition of a public company whose shares are listed on a stock exchange, in contrast to t ...
bid after Hanlong failed to meet the funding conditions. In December 2011, the Ministry of Mining and Geology was invited to London, to receive second place in the "Country of the Year" prize, after Liberia. In January of the following year,
Exxaro Exxaro Resources Limited (Exxaro, the company or the group) is a South Africa-based diversified resources company with a robust coal business and acquisitive growth prospects in minerals and energy solutions. Exxaro is among the top five coal ...
made a US $349 million takeover offer for African Iron. In December 2012, the ministerial council approved the recommendation of the ministry for mines to grant the Nabeba mining permit. MagMinerals Inc., a division of MagIndustries Corp. of Canada, continued financing negotiations for the development of Mengo exploitation permit and the Kouilou potash processing facility. In February, TSC Capital Ltd. of Taiwan withdrew its offer to acquire up to 55% of MagIndustries. In April, Evergreen Resources Holding Ltd. of the United Kingdom, (a subsidiary of Evergreen Industries Holding Group Company, Ltd. of China), agree to acquire MagIndustries. The friendly takeover was completed in July. MagMinerals Inc., a division of MagIndustriesCorp). of Canada, continued negotiations to secure financing for the development of the Mengo exploitation permit and the Kouilou potash processing facility. In April, Evergreen Resources Holding Ltd. of the United Kingdom, a subsidiary of China's Evergreen Industries Holding Group Company, Ltd. MagMaterials projected that the new ownership would make it easier to get finding from Chinese banks like the
Export-Import Bank of China The Export–Import Bank of China (Chexim - China Exim Bank) () is one of two Policy banks (China), institutional banks in China chartered to implement the state policies in Industrial sector, industry, foreign trade, economy, and foreign aid ...
. Despite some challenges, the Republic of the 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 An Internet service provider (ISP) is an organization that provides services for accessing, using, or participating in the Internet. ISPs can be organized in various forms, such as commercial, community-owned, non-profit, or otherwise private ...
-certified port, a capital city across the river from the enormous
DRC The Democratic Republic of the Congo (french: République démocratique du Congo (RDC), colloquially "La RDC" ), informally Congo-Kinshasa, DR Congo, the DRC, the DROC, or the Congo, and formerly and also colloquially Zaire, is a country in ...
market, and a relative dearth of competition. The government is eager to support international investment and is also now largely debt-free. As of 2012, seven mining permits have been granted: * A
potash Potash () includes various mined and manufactured salts that contain potassium in water-soluble form.
permit to MagMinerals Potasse du Congo (MPC) in the Pointe Noire zone (Mengo); * Two polymetal mining permits to the Société de Recherche et d’Exploitation Minière (SOREMI) in BokoSongho and Yanga-Koubenza in the Mfouati/BokoSongho zone * Two polymetal mining permits in Mindouli-Mpassa to the company LULU. * Two iron ore mining permits, one to Core Mining's
Avima The Monts Avima are a mountain range in the Republic of the Congo near Gabon border to the west, and the Cameroon border to the north. The highest peak is the Mt. Avima (949 m above sea level) in a 40 km west to east oriented ridge with sever ...
deposit and the other to Nebaba, held by Sundance.


Geology

Precambrian rocks of the Archean to Neoproterozoic Age form the central part of the Republic of the 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, near the border with the
Central African Republic The Central African Republic (CAR; ; , RCA; , or , ) is a landlocked country in Central Africa. It is bordered by Chad to the north, Sudan to the northeast, South Sudan to the southeast, the DR Congo to the south, the Republic of th ...
border. A giant granitoid
massif In geology, a massif ( or ) is a section of a planet's crust that is demarcated by faults or flexures. In the movement of the crust, a massif tends to retain its internal structure while being displaced as a whole. The term also refers to a ...
known as the Cahillu Massif extends with NS
foliation In mathematics (differential geometry), a foliation is an equivalence relation on an ''n''-manifold, the equivalence classes being connected, injectively immersed submanifolds, all of the same dimension ''p'', modeled on the decomposition of ...
through south-central Congo. At Mayoko a relict greenstone belt occurs, with sub-vertical
banded iron formation Banded iron formations (also known as banded ironstone formations or BIFs) are distinctive units of sedimentary rock consisting of alternating layers of iron oxides and iron-poor chert. They can be up to several hundred meters in thickness a ...
. 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 highly weathered iron-rich
metamorphic rock Metamorphic rocks arise from the transformation of existing rock to new types of rock in a process called metamorphism. The original rock (protolith) is subjected to temperatures greater than and, often, elevated pressure of or more, causin ...
with some parts covered by high-grade
hematite Hematite (), also spelled as haematite, is a common iron oxide compound with the formula, Fe2O3 and is widely found in rocks and soils. Hematite crystals belong to the rhombohedral lattice system which is designated the alpha polymorph of . ...
crust. Iron ore has also been discovered in the northwestern part of the Archaean
Congo Craton The Congo Craton, covered by the Palaeozoic-to-recent Congo Basin, is an ancient Precambrian craton that with four others (the Kaapvaal, Zimbabwe, Tanzania, and West African cratons) makes up the modern continent of Africa. These cratons were fo ...
(Sangha region), within the Chaillu Block. This is a metamorphosed complex of Tonalite- Trondhjemite-Granite
gneisses Gneiss ( ) is a common and widely distributed type of metamorphic rock. It is formed by high-temperature and high-pressure metamorphic processes acting on formations composed of igneous or sedimentary rocks. Gneiss forms at higher temperatures an ...
in which linear belts of metavolcaniclastic rocks and BIF occur.


Mining code

In April 2005, the Republic of the 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 Equity may refer to: Finance, accounting and ownership * Equity (finance), ownership of assets that have liabilities attached to them ** Stock, equity based on original contributions of cash or other value to a business ** Home equity, the dif ...
, but to date has never 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”) with the Congolese government 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 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 the convention, to submit the convention to the Congolese Parliament for ratification and adoption as a state law (“Ratification Law”), 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 Pointe-Noire (; kg, Njinji, french: Ndjindji with the letter d following French spelling standards) is the second largest city in the Republic of the Congo, following the capital of Brazzaville, and an autonomous department since 2004. Before ...
refinery. The refinery has been out of commission for four years and in 2013 had only recently resumed operations. 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 re-injected and 21% flared.


References


External links


Equatorial ResourcesSundance ResourcesCominco Resource Portail National Du Congo
{{DEFAULTSORT:Congo, Republic Of The