Gabon: Striking gold in the mining sector
Gabon’s natural wealth extends well beyond timber and oil into minerals, and while manganese has traditionally been the mainstay of the mining sector, gold and iron ore projects are helping diversify output.
Gabon has a vast array of mineral resources, with more than 900 recorded occurrences, but much of it is unexploited. Until 2012 there was only one company extracting gold in Gabon, Morocco-based Managem, which operates the Bakoudou site near Bakoumba in a 75:25 joint venture with the Gabonese government. Bakoudou is estimated to have around 1.7m tonnes of gold reserves.
Managem’s extracting plant opened in January 2012 with a capacity of 1400 kg per year, producing gold bars with between 93% and 97% gold content. However, as the company has been largely in the exploratory phase, production in its first year was well below capacity, at around 600 kg per year, although this outstripped the previous levels of largely artisanal production. In August 2012 the company announced it would double its gold production in Gabon from January of this year, with output expected to reach around 100 kg per month.
There are a number of other firms currently looking to tap into the seams. In 2012 regional exploration company GoldStone moved into Gabon, having gained permits to perform exploration drilling at sites in Oyem and Ngoutou. Drilling in Oyem, which is in the north of the country, commenced last July with a 3000-metre diamond drill programme. As of the first quarter of 2013, nine holes had been made at the site, with the first two yielding gold at a grade of up to 9.5 grams per metric tonne over a 120-metre-wide area, according to reports from the company.
The explorations at Oyem bode well for the mining sector in Gabon, according to GoldStone’s exploration director for the project, Hendrik Schloemann. “The results from this limited reconnaissance drilling programme are very positive as they confirm that this 15-km-long system contains significant gold mineralisation,” he said in a statement in February.
And while it lost one of its joint venture partners in August when AngloGold Ashanti announced its withdrawal, Canada’s Silver Bull Resources, and its subsidiary Dome Ventures, are also carrying out exploration at sites along the Ogooue River and near the town of Mevang, having recently confirmed an intention to renew the exploration licence.
Nor is gold the only mineral receiving increased interest. The iron ore segment is seeing a jump in activity, with more international companies expressing interest in Gabon. Iron mining has long focused around the site at Belinga, which is considered the largest unexploited iron deposit in the world, with an estimated 1bn tonnes of high-grade ore. In spite of its potential, however, the site has remained undeveloped. Comibel, a subsidiary of Chinese firm CMEC, signed a contract to develop Belinga in 2007, but it was suspended by the Gabonese government in December 2011 due to a lack of activity at the site.
The government has reportedly remained in contact with CMEC about continuing the project, but according to press reports has also made tentative contact with other potential investors. “The negotiations are not finished. We haven’t broken with them in the sense that we’ve told them to relinquish it,” Desire Guedon, the deputy minister of economy, said of CMEC in March. “But we’ve asked them to agree to a revision of the shape of the dossier. They’re still interested in the project. We haven’t named our partners yet.”
Other iron ore projects are under way, however, with Australia’s Volta Mining having being granted two exploration licences last August for the 3922-sq-km Mbombo project in the north-east, directly adjacent to Belinga. Volta is currently one of the largest holders of exploratory iron ore licences in West Africa, with grants covering 5740 sq km.
Another Australian firm, Waratah, announced in mid-May that it would be shifting its focus toward Gabon. The company has had an exploration licence for an area called “Fer-Mekambo-Est”, directly adjacent to Waratah’s Youkou exploration area in the Republic of Congo. The company has announced that it will divest its investments in the Republic of Congo, choosing instead to focus on its assets in Gabon.
“The Congo is no longer strategically suitable for Waratah and does not align with our new business focus on Gabon,” the managing director told local media in May. “We remain extremely positive about the potential of our Gabon licences and will be releasing the results of metallurgical tests … during the next quarter.”
That Gabon’s mining industry is growing at such a rapid pace is encouraging, and while it will not reduce the country’s current heavy reliance on commodity revenues, it will reduce exposure to oil-related shocks. Though there have been some difficulties with Belinga, potentially one of the most profitable deposits, the iron ore segment will likely see significant growth once a new contract is established. Discoveries in the gold segment, too, have the potential to propel the sector toward greater profits.