(Business in Cameroon) - Chinese Tsingshan International reached a binding Memorandum of Understanding with CCC Mining Group Limited, an associate entity of Bestway Finance on the Mbalam iron project, to acquire part of the project’s output. The information was reported by AustSino, which also is a partner of Bestway in the project.
In its April 7 press release, AustSino indicated that Tsingshan agreed to purchase 10 million of iron ore per year over the first 10 years of the project. There is a possibility that the Chinese partner will purchase up to 50% of the iron output, meaning that it could swallow a minimum of 100 million tons by the end of the contract and a maximum of 258 million tons, based on the initial estimates of the deposit's potential (517 million tons) made by Sundance Resources, the project's first developer.
“This is the first agreement concerning the provision of iron ore from the overall project,” AustSino indicated, which could imply that the exploitation phase is coming soon, a step the Cameroonian government has been expecting for nearly a decade. However, there are still grey areas.
The President of the Republic of Cameroon has granted the mining permit for the Mbalam iron project to Cameroon Mining Company Sarl (CMC), a subsidiary of the Singapore-based investment vehicle Coconut Logic Holdings Pte Ltd. The latter also controls Bestway Finance. The question one may ask is why an important buyer like Tsingshan International did not reach the deal with CMC but rather with CCC Mining, which only joined the project in November 2022 as part of the port and rail component of the project. Plus, AustSino revealed that four other Chinese companies have joined the project since the permit was issued. These include China Railway 20 Bureau Group Corporation (CR20G), China Machinery Engineering Corporation (CMEC), China Civil Engineering Construction Corporation (CCECC), and China National Chemical Engineering Heavy-Mechanized Corporation Ltd (CNCEHMC). And no official statement has been made on the contribution of these companies to the project. Bestway Finance also did not make any comment when contacted by Business in Cameroon.
Lack of transparency
There is also a significant lack of transparency around the awarding of this permit. Indeed, eight months after its issuance, it still has not been made public in violation of Article 144 of the Mining Code of 2016. This article states that "the acts that enshrine the award, extension, renewal, transfer, farm-out, withdrawal or waiver of an operating permit must be published in the Official Journal and the newspapers of legal announcements."
As a reminder, the Mbalam iron deposit, which extends to Nabeba in Congo, is considered a world-class reserve. Sundance Resources Ltd, the first developer of the project, planned a two-phase deployment. Phase I would consist of the annual production of 40 million tons of direct shipping ore over 12 years, and phase II would consist of the extension of the operation stage by over 15 years thanks to the production of a high-grade hematite itabirite concentrate. This project roadmap required an investment of more than CFA5,000 billion.
Written by Cédrick Jiongo
Translated from French by Firmine AIZAN