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Cameroon bauxite project gets green light

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Cameroon bauxite project gets green light

Development of the Minim Martap bauxite mine will benefit Cameroon in a number of ways, including through job creation, generating export revenues and infrastructural development. Neil Ford reports.

Australian firm Canyon Resources has decided to proceed with the development of its Minim Martap bauxite mine in Adamawa Region in northern Cameroon. Bauxite is the principle raw material used in aluminium production.

The firm has completed the venture’s pre-feasibility study and decided on the best strategy to export ore from the mine. Two options were under consideration: using the existing Camrail railway that runs from close to the mine to the port of Douala or building a spur line from the railway to the new deep-water port of Kribi.

The former has the advantage of an existing rail link but Douala has a very shallow draft and so cannot accommodate large bulk carriers; so the bauxite would have to be loaded on to barges to be carried out to waiting vessels and then transferred. This process increases the cost and time required.

By contrast, Kribi is a more modern port and its deep-water harbour has double the draft at 16m, but there is currently no rail link and it would be expensive to transfer it by road. In both cases, it appears that the bauxite would be exported as ore for refining into alumina and then used in aluminium production at its final destination, with China an obvious target market.

Canyon has now opted for a two-pronged approach. It will ship the ore out of Douala in phase one, generating revenue to help finance the rest of the project.

At the same time, work will begin on building a 130km spur line to Kribi from the main railway. Once this is built, exports will be switched to the newer port.

Canyon reported: “The consistent high quality of the Minim Martap bauxite mine offsets the cost of rail haulage, supports efficient refining by the end user and sets the platform for further upside potential.”

Developing the project could also generate the revenue to enable Canyon to develop its Ngaoundal bauxite deposit, which lies adjacent to Minim Martap.

The company increased its reserves estimate on the deposit from 550m tonnes to 892m tonnes last November. The pre-feasibility study calculated average operating expenses of $35.1/tonne, with anticipated production of 5m tonnes a year.

Although other new mining projects are planned in Cameroon, Minim Martap will be the first, so there is plenty of spare capacity on the railway. It is not expected that any infrastructural upgrades will be needed, although some new cargo handling equipment will obviously be required. A feasibility study has now been launched to determine the detailed development of the project.

Interestingly, Cameroon is one of the few African countries with aluminium production capacity. The Édea aluminium plant, which was the first aluminium smelter in Africa, lies 65km from Douala and has nameplate production capacity of 100,000 tonnes a year. However, it does not appear that ore from Minim Martap will be used to feed further aluminium capacity within Cameroon itself.

Global importance

Cameroon should offer significant competition for Guinea in the global bauxite industry, as the latter currently controls most of the world’s seaborne bauxite trade and supplies the lion’s share of China’s bauxite imports.

Although, as with other mining commodities, demand has been badly affected by the Covid-19 pandemic, longer-term international demand is growing. Over the past decade, the volume of bauxite traded by sea has increased by 255%.

Minim Martap will benefit Cameroon in a number of ways, including through job creation, generating export revenues and infrastructural development.

It could also encourage the development of other mining projects in the country. A 510km railway will be needed to transport iron ore from Sundance Resources’ Mbalam-Nabeda project to Kribi because it is located at the other end of the country, near the border with Congo-Brazzaville.

The higher cost of the Sundance project means that international iron ore prices may need to recover considerably before it is developed. Capital costs on Mbalam-Nabeda were estimated at $4.7bn seven years ago and so are likely to be considerably higher now.

The company is currently in talks with another Australian company, AustSino, to offload most of its stake in the venture. AustSino will need to renegotiate the terms of the concession with the government as the previous concession with Sundance is understood to have expired in March 2019. Sundance had planned to produce 40m tonnes of iron ore a year on the project. 

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