(Business in Cameroon) - The Portuguese construction company, Mota-Engil SGPS, S.A. (NYSE Euronext Lisbonne: MOTA ENGIL), will be building the 510 km railway connecting Mbalam in the east of the country to the deep water port in Kribi in the south. Another 71 km connecting Nabeba (Congo Brazza) to Mbalam is in the works. The Portuguese company will also build the iron berth of the deep water port at Kribi which will enable the stocking of cargo from the Mbalam mine.
An agreement between Mota-Engil and Cam Iron was signed on June 5, 2014 in Yaoundé between the CEO of Mota-Engil Africa, Gilberto Rodrigues, and the Managing Director of Cam Iron, Serge Asso’o. This was done in the presence of the CEO of Sundance Resources, Giulio Casello, and Cameroonian Prime Minister, Philémon Yang.
Already present in many African countries where it is currently engaged in a series of construction projects, Mota-Engil is no newcomer to railway construction. The leading Portuguese construction firm has already built 147 km of railway in Malawi starting from the border with Mozambique, where the company was active in 2013, with two mine railway contracts covering 100 km between Nkaya and Entrelagos, for a budget of 78 million € (approximately 52 billion FCfa).
In 14 months, the construction project will connect the Moatize mine to the deep water port of Nacala. The second project concerns the modernisation and securing of the Sena 550 km of railway between Beira and Moatize. The cost of the project that it is completing in partnership with Edivisa in Mozambique is estimated at 162.7 million euros (around 106 billion FCfa).
Uganda and Angola
In May 2014 in Uganda, Mota-Engil landed a 60 million euro contract for the widening of the Northern Bypass located in Kampala. Roadwork is expected to begin in June and will last 30 months. In Angola, it has been present since 1946 and has opened 12 subsidiaries. In March 2014, Mota Engil announced the creation of two new subsidiaries. One will be specialised in tyre recycling and the other will do electrical network assemblage. It was based on these accomplishments that Mota-Engil, through its local subsidiary, reached a joint-venture agreement with Visabeira on May 15, 2014 to create Vista Power which will operate in the energy, transportation and electrical distribution sectors.
The company signed a contract with the local public authorities for the construction of 240 km of roadway connecting Zambia to Malawi for a total of 118 million euros. It plans to invest 36 million there. The Portuguese company also has on-going construction projects in Ghana. Cameroon is the tenth African country to welcome the Portuguese company. “Africa is our future. We believe in Africa. We are determined to find solutions for Africa’s challenges,” stated Gilberto Rodriguez to the press.
Interviewed about the sit-in by Mota-Engil employees in Malawi last February due to “the massive importation of Portuguese workers,” Gilberto Rodriguez assured journalists that Cameroonian jobs were safe. The company has around 5,000 employees, according to estimates. He also denied information that the company brought in project foremen from South Africa. Serge Yanic Nana, Lead Advisor to the Cameroonian government, took the opportunity to specify that, in the negotiations held, local jobs were integrated as well as training for local executives. Furthermore, the labour unions were taken into account, he stated.
Engaged in a strategic plan christened “Ambition 2.0.”, the Portuguese group wants to make Africa the centre of its internationalisation plan. At the end of the first quarter of 2013, it had already garnered two contracts across Africa worth 500 million.
According to the CEO of the group, Gonçalo Moura Martins, with orders received in Africa in 2013, Mota-Engil reached unprecedented levels of activity in Africa, giving it a competitive advantage in a very tight market.
Created in 1946, Mota-Engil went to Porto in Portugal. The company is a subsidiary of Mota Gestão e Participações, SGPS, SA. Its net results in 2013 increased by 24% to 50.5 million euros. Its total sales on foreign markets surpassed 74% of the total (2012: 65%). Its sales in Africa and Latin America climbed to 35%. Its earnings before interest, income tax and other deductions or provisions in Africa amounted to 244.2 million euros compared to 85.5 million euros for Europe and 35.5 million euros for Latin America.
The Mabalam Project
Mbalam-Nabeba project is located in Central Africa and will include an iron mine in Cameroon and another in Congo that is served by a railway network of 510 km crossing from east to west Cameroon to the deep water port on Cameroon’s west coast as well as 71 km of rail connecting Nbeba to Mbalam. The project will produce high-grade haematite (HHT) also known as Direct Shopping Ore (DSO) for at least 10 years until the reserves have been exhausted. This project will then move to lower grade itabirite mining for 25 additional years.
The company has been registered in Cameroon since April 27, 2005 with the Yaoundé Trade and Personal Property Credit Register, Cam Iron SA. Its capital is divided between the Australian company Sundance Resources Ltd (SRL) and local shareholder company, HoldCo, respectively by 90% and 10%. This is the company that holds two exploration licenses on the promising concessions of Mbarga Hills where the French Office of Geological and Mining Research (BGRM) had conducted magnetic surveys in the 1960s. The project agreements with the Cameroonian and Congolese governments and the engineering arrangements were finalised in late 2012.
Schedule for the completion of the Mbalam iron project
• Completion of the final feasibility study: 6 months starting from the date the Mbalam Agreement was signed
• Finalisation of the financial framework: 12 months subsequent to the signing (on June 5, 2014) of the EPC infrastructural construction contract
• Start of preliminary work on the sites: late 2014
• Start of work on mining infrastructure: 2015
• Start of railway and port construction: 2015
• Start of business activity: early 2019
Source: Services of the Prime Minister of Cameroon