Tumultuous events on the surface have prevented investment in Cote d’Ivoire since the dawn of the new century, but today’s stability has encouraged a scramble for mining rights in West Africa’s most overlooked and prospective mining destination.
The global mining community has known for decades that Cote d’Ivoire sits on resources worth exploiting, but tumultuous circumstances above ground have kept most investors wary of setting up business within its borders. A coup, civil war, and economic downturn have plagued the country’s entrance into the 21st century, but the re-election of President Ouattara in 2015 serves as an indication of of Cote d’Ivoire’s recent stability. Those already established in Cote d’Ivoire do not dwell on the conflicts of the past; instead there is a stir of excitement for having found the pot of gold before the rest. The increase in gold prices, coupled with large-scale regulatory reform, makes Cote d’Ivoire’s large portion of the Birimian belt more attractive than ever. Players who left the market years ago are now seeking points of re-entry, and current producers are snatching up as much land as possible while they still can.
Ouattara’s National Development Plan (NDP) 2016-2020 includes structural reforms that aims to further stimulate the recent surge in both private and public sector investment. Agriculture remains the primary contributor to GDP—cocoa, coffee, cashew nuts and sugar having all seen an increase in production in 2015—yet mining has risen as a critical focus over the past two administrations. The passage of the new mining code, in March 2014, removed the additional profit tax (which was formerly payable by permit holders at the rate of 7% of turnover), introduced greater transparency in permitting procedures, elongated the time period for initial exploration permits (extending the range from 3 to 4 years), and limited State participation to 15% of the share capital of each mining company, among other changes.
As the government works to effectively implement the new legislation, Cote d’Ivoire’s NDP also posits a necessity for increasing its capacity in raw materials processing. Pragmatically, any form of value addition has seen little fruition to date across industries. “Cote d’Ivoire is focusing on diversification of its mineral production, with developments in manganese, calcined bauxite and nickel; however, in a number of cases mining licenses are being applied for and granted on the back of studies that do not include any processing. We are not exporting minerals; we are exporting ore,” notes Ludivine Wouters, managing partner of Latitude Five, “This attracts operators looking for projects with the potential to rapidly generate cash flow, but seems at odds with the State’s industrialization policy.”
Due to the adolescence of Cote d’Ivoire’s mining industry, after extracting and crushing the ore, it must be exported for further treatment to countries that have longer mining histories, such as Ghana or Mali. Gold remains the country’s driving resource, which limits the possibilities of beneficiation by nature, but the integration of labs and refineries present interesting opportunities for impending investment given Cote d’Ivoire’s central West African location and the ease of doing business in comparison to its neighbors.
The sustainability of Cote d’Ivoire’s mining industry, however, primarily depends on the uptake of exploration activity. Hosting only five gold producers—La Mancha, Newcrest, Randgold, Perseus and Taurus Gold—the 23.5 metric tons per year (mt/y) current output is miniscule in comparison to the 600 mt/y known potential, and microscopic in comparison to the cumulative unmapped reserves. Two new mines are under construction: Perseus is currently building its Sissingué mine in the North and Taurus Gold is underway with the Afema Mine on the intersection of the Bibiani and Asankrangwa belts. Three manganese mines also contribute to national GDP, but adverse commodity prices have kept operations lean. Thankful to the upswing in gold prices, Cote d’Ivoire’s major multinationals have both increased their exploration budgets and begun strategic acquisition. “Although Cote d’Ivoire continues to attract significant attention as the newest exploration destination of West Africa” explains Wouters, “new entrants sometimes remain cautious despite the hype, with M&A over the last years often consolidating any advanced or significant exploration into the hands of current producers.”
Given the lifecycle of mining permits pre-2014, now is the time for renewals and purchases, and the existing multinationals are knocking on the Ministry’s door looking for more. Most recently, Perseus Mining acquired Amara Mining in April of 2016, granting access to their Sissingué and Yaoure gold projects.
Yet, some dedicated juniors are expectantly pouring significant investment into the country. Predictive Discovery, which operates on a project generator model, created a joint venture with Toro Gold to develop their Boundiali, Ferkessedougou, and Kokumbo concessions. “After surveying, the greatest success was a 24 part per billion (ppb) anomaly from a 15 square kilometer (sq. km) catchment at Boundiali, which could reflect a world class gold deposit,” stated Paul Roberts, managing director of Predictive Discovery Ltd.
The pair have recently begun drilling activities that have shown impressively promising geochemical irregularities. “There is a significant amount of work still to be done in all of our permit areas, but currently Boundiali is our main focus. Kokumbo is also part of a very well mineralized belt and we have had some encouraging diamond drilling results,” concluded Roberts.
Ferdinand Koffi, local Ivorian and director of Jofema MinEx Projects, has picked up two permits from companies that abandoned them during the crisis and is now partnered with a South African company to get the necessary geophysical results to capture investors’ attention. “If you look at the ratio of ounces that we have found to the amount of money we are putting into exploration, its obvious we are sitting on something valuable,” Koffi noted.
The ore grade ranges from 0.6 grams per tonne (g/t) to 2.5 g/t, meaning that the production of this deposit will eventually be based on volume. Jofema currently is finishing its feasibility studies, meanwhile serving as a promising case study for local and multinational collaboration grown from Ivorian roots.
Cote d’Ivoire is not an exception to the global challenge of sustaining national security. March 13, 2016, the first terrorist attack in the country’s history occurred at the Grand Bassam beach resort. Mining executives, however, posit that this should not serve as a deterrent to entry. The administration and the ministry are working to uphold their promises for increased security and improved transparency across a multitude of institutional layers. The United Nations is steadily decreasing the number of uniformed personnel stationed in Abidjan, Cote d’Ivoire’s economic capital, and has increased confidence in Cote d’Ivoire’s governance. Cote d’Ivoire became EITI compliant in 2013, the diamond embargo was lifted by the UN in 2014, and Kimberley diamonds resumed exports in March of 2015. In January of 2016, the Ministry of Industry and Mines made the commitment to implement a modern mining cadaster system for improved efficiency and clarity of ownership.
Aside from challenges common to the operational environment of African terrain, Cote d’Ivoire is unanimously deemed the top mining destination in West Africa for those who have the experience and girth to commit to a long-term vision in the region. Its exceptional infrastructure, connectivity, and political stability fill in the cracks of what was once a shaky foundation.