Cameroon’s 2001 Mining Code: A Great Attraction for Foreign Investors!

Dr.David Makongo

  By Dr. David Makongo*
After the Supreme Court of Cameroon proclaimed Paul Biya winner of the October 9, 2011 presidential election, the President-elect in his inaugural speech, November 3, 2011, after taking the Oath of Office before the National Assembly, placed his new seven -year mandate under the banner of “major accomplishments.”

Does this mean the president will not wait until push comes to shove before reviewing Law Nº 2001-1 of 16 April 2001regulating mining activities so as to convert the abundant human and natural resources potential of Cameron into ‘major accomplishments?

The 1980s and 1990s were years most African nations revised their mining codes to benefit from globalization and privatization.
Though Cameroon embraced more privatization and less government involvement in the private sector, the 1964 nationalistic post-colonial mining code was not revised to reflect changes in the mining and economic policy to take advantage of intense capital moment and privatization.

Hence, President Biya’s decision in 2001 to change the 1964 mining code to equal the shift in the mining policy pendulum was a step in the right direction and the increase in the number of mining companies in Cameroon since 2001 is eloquently testimony of the rightness of that decision that has attracted more foreign capital into the virgin mining industry of Cameroon.

By replacing the nationalistic mining regime of the post-colonial era with a more investment friendly and attractive modern mining ideology and legislation, President Biya dealt away with vestiges of a hostile mining environment epitomized by the 1964 archaic mining commandment
The new (2001) mining code is modern and, in many ways, demonstrates Cameroon’s willingness to opt out of the dark past and embrace a regulation that is very attractive and generous to future foreign investors and also capable of producing jobs and promoting competition and transparency within the mining industry.
Mining investors must have Cameroon in their plans 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.

Cameroon now -more than ever before, presents enormous prospective opportunities for mining investors with a mining code that is extremely generous and friendly to all investors without discrimination. Here are some sound fundamentals of the Cameroon mining code:

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.

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.

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 meeting commitments in all forms of exploration and exploitation budgetary requirement, 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. Meanwhile, for a 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.

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.
The 2001 Mining Code brings stability and guaranty of fiscal and legal conditions related to mining tenements. Cameroon accepts arbitration of business disputes as a member of the ICSID since signing the Convention September 23rd 1965.

The 2001 mining law does not discriminate between local and foreign companies or nationals: 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.
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.

Above all, Cameroon is arguably the most peaceful and politically stable nation in all of Africa. As an emerging democracy, Cameroon is very friendly to investors and the hospitality of its diverse population towards foreigners is second to none. 
Today, most African countries are going back to the drawing board to revise their mining codes again in order to take advantage of producing mines and 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.

It is justified to review the code to raise revenue and build much needed infrastructure and put Cameroonian youth to work, review the code and refurbish the old system of administration of mining activities in Cameroon and make it more adaptable to today’s global demands of the industry, review the code and involve from the onset other government services and local communities implicated in mining activities for the efficient and smooth operation of the mining industry of Cameroon.

*David Makongo, PhD, is a Cameroonian. He is Founder of Makongo & African Partners LLC, USA. (Experts in Africa Mining and Oil and Gas Issues).