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Cameroon: An Announced General Audit in the Mining Sector

16 mining companies have just lost their exploration licences while the Minister of Mines has announced a larger scale clean-up of the sector.

by Serge D. Bontsebe

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Audit dans le secteur minier au cameroun
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The Minister of Mines, Industries and Technological Development, Gabriel Dodo Ndoké, on February 24, 2021 in a press release invited some mining companies (cited below) to pass by his ministry to “collect the decrees to reverse within the national mining domain the perimeters covered by their exploration permits” and equally urged the companies to “pay their unpaid surface area duties to the National Treasury”.  According to the Minister, the National Treasury is claiming from these 16 mining companies, who at the moment are holing 24 exploration licences, a little bit over FCFA 175 million, meant for surface area duties.

According to information from Investors4Africa, these companies are thus paying for the non-respect of contact dispositions which link them to the State of Cameroon like the non-respect of the specifications document, non-payment of surface area duties.

From analyses, this cleaning which is coming a few months after the creation of the National Mining Corporation (SONAMINES) in mid-December 2020 by the President of the Republic, Paul Biya is part of the plans of Cameroonian authorities to clean up a particularly rich mining sector plagued by negative vibes which leads to the loss of heavy resources by the State. If at the moment only the small companies are concerned by the measures taken by Gabriel Dodo Ndoké, Cameroonian authorities who say have not yet delivered industrial exploitation permits, is preparing to attack the global small wigs present in Cameroon. “It is preliminary work for the general audit of all exploration licences and local exploitation authorisations. Thus, the big names on the lane of regulation will suffer the same fate”, a source at the Ministry of Mines stated.

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In the midst of events, Cameroonian authorities are showing much less patience in relation to certain heavy weights in the Cameroon mining sector, who do not always respect the specification documents signed by the State. In an assessment study on development funding in Cameroon carried out by the Cameroonian Ministries of the Economy and Finance and the United nations Development Programme, (UNDP), which was made public in March 2020, this administration had already proposed to government to “renegotiate the contracts and licences of the most profitable enterprises (extractive industries (petrol, mines, wood, fishing) and telecommunications companies)”.

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If they had not yet received it, Cameroon could benefit from IMF assistance through the Fiscal Analysis Resource Institute (FARI) to assess the effectiveness of its extractive taxing system. This renegotiation will reinforce the funding of public infrastructure and the human capital (with health insurance and universal social protection), which are the most important and dependent users to support their production and work force. According to investigations from the investors, the contribution of this renegotiation will be four times more important for the additional investment achievements than tax incentives”. The authors of the report stated before citing examples in Bolivia, Botswana and Mozambique, “as counties which have renegotiated these contracts with enormous impact on tax revenue (increase of 3% to 10% of the GDP) without risking the escape of the companies.

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