Historically, the exploitation of mineral reserves in the Eastern Region has played a big role in the economic performance of the Oriental. It has also shaped the social fabric of communities. For decades, coal mining was essential for the livelihood of whole towns, providing jobs as well energy for the region. Despite a reduction in mining’s importance to the local economy, government plans to revive the sector and pay homage to its significance to the region’s identity are set to put the industry back in a prominent position.
After the discovery of notable deposits in the area, carbon mining began in 1939. The community of Jerada gained economic growth from mining, initially from exporting its coal to other regions of the kingdom. In 1971 the new thermo-electric power plant was built and quickly became the biggest consumer of the region’s coal, which allowed the facility to produce about one-third of Morocco’s electricity.
SHIFTING SANDS: Things changed in 1990, however, with the exhaustion of available coal reserves and the consequent economic downturn. Further exploration of potential deposits north-west of the original mine site revealed a disappointingly lower quantity of minerals than expected. In addition to these bleak prospects, the selling price of locally mined coal became 2.5 times more expensive than imported coal.
The mine was eventually closed in 2001, which had a pervasive effect on local living standards. A report by the Oujda Chamber of Commerce, Industry and Services classified Jerada as the region’s poorest province, using 2007 figures, with a poverty rate of 22.8%, significantly higher than the 5.4% poverty rate in the Oujda-Angad province or even the 13.8% poverty rate in the isolated oasis town of Figuig.
Despite losing the lustre it had decades ago, especially in the case of coal production in Jerada, the Eastern Region still accounts for 48% of the country’s lead production and around 19% of barite output.
LEGAL CHANGES: The mining sector in Morocco accounts for Dh53.6bn (€4.7bn) in exports and employs about 35,000 people, according to a 2011 report by the National Bureau for Hydrocarbons and Mines (Office National des Hydrocarbures et des Mines, ONHYM). Most of the sector is driven by phosphate production, which accounted for 28m tonnes of the 30m tonnes produced in 2011, under the management of the national phosphates company, OCP Group, formerly known as Office Chérifien des Phosphates. Over the past few years the Moroccan government has been changing the mining laws to encourage investment in mining other minerals, which exist in lower quantities than phosphate, but have been able to attract some foreign investment nonetheless (see Mining chapter).
In the Oriental region, the government is aiming to garner interest for some of its mineral deposits. According to a document published in 2012 by the Oujda Chamber of Commerce, Industry and Services, the lead, zinc and silver deposits at Sidi Lahcen in the Debdou region, the existent manganese mine in Bouarfa, and the zinc deposits south of the city of Oujda all present opportunities for development.
REVAMPING EXPLORATION: The government is looking to sweeten the deal for companies willing to reopen some of these mineral exploration sites or find new ones. Currently, the mining code is well over six decades old and in desperate need of an overhaul. However, a draft law is pending, which, when passed, will help update terms for exploration and commercial production, and put in place more rigorous bidding and evaluation mechanisms.
Fiscal terms are not particularly onerous compared to many other mining producers elsewhere on the continent. According to the law for non-phosphate mineral exploration, all mineral-exporting companies operating in the country pay a reduced tax rate of 17.5% tax. Other incentives include 50-70% government financing for a project’s basic infrastructure needs, such as roads, as well as access to utilities such as water and electricity. Although the mining industry’s lobbying body has long pushed for lower corporate taxes, rates remain below those in sub-Saharan countries like Ghana and South Africa.
LICENSED TO DRILL: Investment into mining licences is managed by the ONHYM, which spends between Dh100m (€8.9m) and Dh120m (€10.7m) annually on the exploration of potential mineral areas, according to an investment report about the region published by the UN in 2012. The public entity’s role is to partner with investors as well as reduce the risks associated with exploration through initial prospecting. Companies entering into the sector can partner with the ONHYM, but the government arm can only own up to 30% of new mining ventures. For 2013, the state entity has plans to continue to explore for carbon sediments in the central region south of Oujda to develop industrial mineral prospects in the Nador region and to prospect for precious metals in the Bouarfa region.
Investors have the opportunity to enter the market in two ways, either through the exploration of a certain region and mining of discovered deposits or through the licensing of an existent concession with proven mineral reserves. Exploration licences are given for 16-sq-km plots for a duration of three years and can be extended for an additional four years. Mining licences are for a four-year period and can be extended for three additional four-year periods. This latter method is the most prevalent in the Eastern Region, where a number of previously abandoned areas still present opportunities for mining. In 2012 the Regional Investment Centre in Oujda registered 84 new projects in the mining and energy sectors with a total overall investment of Dh157.7m (€14.02m).
PICKING UP THE PIECES: The Jerada coal mine once epitomised the region’s potential for underground riches, but its subsequent fall and decline – like coal-mining towns from Pennsylvania to Yorkshire – has left the area in a poor state. However, there are moves afoot to try and revitalise the area, including through the creation of an open-air museum. Agence de l’Oriental, in conjunction with the Ministry of Energy and Mines, the Ministry of Culture and Jerada’s Provincial Council are working to establish the Parc Muséologique Minier à Jerada, hoping to bring increased economic activity to an area with one of the highest rate of unemployment in the entire Eastern Region.
The initial studies for the creation of the park took place in 2010. The old mining area will be protected from further development and a museum facility will be established, which will showcase old mining equipment and the region’s broader history. It will include areas for cultural recreation, sporting areas and a hotel.
However, the project will require amending current legislation on historical sites. In 2012 Agence de l’ Oriental took part in discussions to change the existing law that regulates the protection of national heritage to allow it to include industrial sites, buildings and equipment and give them the same status as historical monuments in terms of governmental protection.
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