Fabrice Nzé-Békalé, CEO, Société Equatoriale des Mines (SEM): Interview

Interview: Fabrice Nzé-Békalé

What major improvements does the new Mining Code bring to foreign investors?

FABRICE NZÉ-BÉKALÉ​: The revision of the Mining Code has been a long process initiated more than four years ago. There was a need to bring some clarifications not only for existing investors, but also for new foreign investors who required a more stable and accurate legal framework to start their investment in the country. In the former code, there were still a lot of uncertainties. The status of the SEM was, among others, not specified. Under the new revision, responsibilities have been defined between the Ministries of Mines, Industry and Tourism; the SEM; and the new regulatory authority, which should be created over the course of the next few months. Additionally, there is a whole chapter dedicated to the protection of foreign investors, including various modalities of protection for investments, mechanisms of guarantees, the acknowledgment of bilateral agreements and arbitrage procedures on behalf of the state, as well as the inviolability of mining titles. It also has a special focus on industrialisation and minerals processing. Investors are encouraged to engage in mineral processing activities through lower tax rates. The code also includes new provisions related to the protection of the environment as well as to the corporate and social responsibility of mining firms operating in Gabon.

What are the major challenges to overcome for the establishment of the Bélinga iron mine?

NZÉ-BÉKALÉ​: The process of certifying minerals, carried out by consultant SRK, started in 2012 when the government ordered the minister of mines to begin negotiations with China Machinery Engineering Corporation, owner of the Bélinga iron concession. In December 2013 the company was reimbursed $33m for the work it had done, and the state took over the project. The minerals certification process is again under way. It is a two-phase project. We are still in the first phase, which we expect to determine the presence of 500m tonnes of iron in Bélinga. Some delays have, however, occurred due to weather conditions. The area is very difficult to access in the rainy seasons. Progress has also slowed due to an increase in costs since June 2014. However, we are still carrying on with the certification process and the programme should even accelerate as of June 2015.

How much potential is there for rare minerals?

NZÉ-BÉKALÉ​: We cannot so far quantitatively assess the reserves of rare minerals. However, there are some exploration firms that have obtained licences to carry out studies to determine the potential. As for uranium, it has previously been exploited in the country by Areva. Niobium is also present in the Mabounie area, where a subsidiary of Comilog currently holds a research permit to evaluate the existing deposits.

To what extent can infrastructure still be improved to facilitate the transport of minerals?

NZÉ-BÉKALÉ​: Infrastructure is a key element in the development of mining activities in Gabon. In the past four years, we have encouraged more and more operators to carry out mineral exploration in the country, which increases the likelihood that we will begin exploiting new deposits. Over the past few months, the government and rail operator Société d’ Exploitation du Transgabonais have been discussing plans to upgrade the railways, from their existing capacity of 4m tonnes of mining products to 7m tonnes. Discussions are under way with financial institutions, and an agreement should be signed in 2015. Construction of the new rail infrastructure will take up to 24 months, lasting until late 2017 or early 2018, and it will primarily handle production from the new manganese mines in Okondja and Franceville. Additionally, more manganese from Ndjolé will be transported by rail and, potentially, some of the iron ore from Monts de Cristal.