Thursday, Oct 19, 2017
Government | Mining | Africa | Equatorial Guinea

Mining in Equatorial Guinea

The US could have a fundamental role in Equatorial Guinea’s mining industry


2 years ago

H.E. Mr. Santiago Mba Eneme Nsuga, Mining Secretary
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H.E. Mr. Santiago Mba Eneme Nsuga

Mining Secretary

Equatorial Guinea is finishing its surveys and about to start its mining industry. There is evidence of bauxite, coltan, diamonds and gold amongst other. 

In 2007, the government of Equatorial Guinea established an ambitious plan called Horizon 2020; its first stage, which is establishing a basic infrastructure for the people, is now almost complete. What challenges is Equatorial Guinea facing in order to reach the Horizon 2020 objective of becoming an emerging country?

Horizon 2020 consists of the goals that Equatorial Guinea should reach for the country to come out of its poverty, and I think it is possible to achieve it. You already know that the first stage of the government's policy was to build the basic infrastructure that every country needs, so the government invested a lot of money in building roads. Equatorial Guinea is currently one of the few countries in Central Africa, and in Africa in general, with a 92% or 95% of paved main roads. Today, the highways of Equatorial Guinea communicate all districts and all municipalities with one another, and that can be seen at any time when you travel across the country, either on mainland or on the island.

Another achievement of the government is the construction of port and airport infrastructure. Previously, to unload a ship at the port of Malabo you needed to queue up, but today we can boast about having the largest port in Central Africa, which can accommodate up to eight large ships at the same time. Frankly, I think this is one of the achievements that can, in the short term, turn Equatorial Guinea into one of the strategic hubs of the region.

Another huge achievement that the government of the Republic of Equatorial Guinea is reaching is airport infrastructure. We used to have only two airports, in which actually a large aircraft such as a Boeing 747 couldn't land, but today Equatorial Guinea has five big large capacity airports: the Malabo International Airport, the Bata Airport, the Mongomeyen, the one on Corisco Island, and the one on Annobón Island. Any aircraft of any tonnage can land on the International Airport of Malabo. We also have now an enviable air fleet, the Ceiba Intercontinental company, which is owned by Equatorial Guinea and has state-of-the-art equipment. We can fly from Malabo to Madrid in a Boeing 777 with high standards. The government has prepared the basic infrastructure for the country to face the next stage, which is the development of agriculture, how to produce and supply markets to make Equatorial Guinea a truly emerging country by 2020.

We must not forget also that Equatorial Guinea is looking for different ways to diversify its economy. I will focus on my ministry in this aspect. In this country we have been talking about oil since the 60s, but the actual explorations started in 1991. Back then it was all managed by the American company Walter International, which extracted only 2000 barrels per day, an insignificant amount if you want to enter the oil market. But then there started to arrive several American companies, some of them to produce condensate, and others crude oil. Some of these companies were ExxonMobil, Marathon, and also Noble Energy, which is currently operating in the OII block. These companies started to develop the oil sector, and because of their good figures others started to come as well, for production and other developments, such as GEPetrol, G3 Oil & Gas, PanAtlantic, and others. Since then Equatorial Guinea started to move towards development, thanks to the oil produced by these companies which directly or indirectly contributed to the state coffers.

Nowadays we know that oil will run out at some point, so the government of Equatorial Guinea, through the Minister of Mines, Industry and Energy, has started the diversification stage. For example, we are building storage tanks for crude oil and petroleum products in the city of Luba, in order to turn it into a strategic point for storage of petroleum and its derivatives, not only in Equatorial Guinea but also in the entire region. This can greatly benefit our neighbouring countries and of course the people of Equatorial Guinea as well, because it will contribute to lower the fuel costs in the domestic market. But also in the foreign market. If, for example, Cameroon needs to carry fuel to their country, instead of going all the way to Singapore they will be able to load their vessels here in Luba, which is much easier to do. That will turn Equatorial Guinea into a strategic hub.

But at the same time, Equatorial Guinea is working to increase the added value in the hydrocarbon sector. We are currently working on several projects to achieve this. For example, there is the Alba project operated by Marathon, which produces condensate, propane, butane, and the remaining gas which we use in turbo gas to supply power to Malabo. This means that we're already using petroleum products and selling them in the international market. We also plan to build an ethanol plant, which is another key point. We have the LNG plant; you know that Equatorial Guinea is the 14th seller of this product in the world, and our main markets are the United States, China, and some European countries. All this means we are very diversified in the oil sector.

If we focus on the energy sector, there are also some very ambitious projects. There are currently 20 energy projects being developed in Equatorial Guinea. As I pointed out before, the market for Equatorial Guinea in Africa is very wide; our country is currently one of the few in Central Africa where the mainland is supplied with energy 24/24, all municipalities have power. And now the government is planning to supply power to all village councils. We are also building a second hydro-electric power plant in Sendje, with a 200 MW capacity. We plan to build micro power plants in all places where we can use the water for it. This helped the government to save large amounts of money, because previously we used thermal power plants which, on one hand, meant a high cost on fuel, and on the other hand were not environmentally friendly. We are using clean energy now, Equatorial Guinea is using new technologies for energy supply in the mainland. We are providing electricity to the cities of Ebebiyín and Mongomo, two cities which were in great need of expanding their energy supply because of their rapid population growth. The Ministry has now started to connect the Oyala infrastructure with the Sendje hydro-electric plant, always having Horizon 2020 in mind.

Regarding the mining sector, after some important government-funded studies we will soon have a new law and new regulations in the sector, which once again will complement the investment laws in the country. Our goal is to protect the investors who come to Equatorial Guinea, so they know the advantages and realities of the country when it comes to the government involvement. This is why we conducted researches together with other countries, and detected that in Equatorial Guinea we have several minerals such as cobalt, bauxite, there is evidence of the existence of diamond, iron, and gold. We are now focused on finding out how much of these minerals we actually have, and how they can we develop them in case we find enough quantities. This is the current goal of the Ministry of Mines, Industry and Energy for the mining sector.

Currently, this government official has just made a tour to experience in situ the exploration of bauxite in Evinayong. We have chosen one centre in Evinayong and another in Aconibe. So far the results are promising, hopefully our studies will back us, and so in the medium and long-term we will be able to build an aluminum plant in Equatorial Guinea, which will provide the Guineans with new jobs and a new influx of money to the treasury.

The program is very ambitious. We're talking about the industrialization of Equatorial Guinea, and we want to do in the city of Mbini, where we are planning to focus our industrialization. As we already have a very good road network, we don't want to limit ourselves to that place; if we get to build the aluminum plant, we would work on further railway infrastructure to transport the material from the deposit to Mbini. In short, I think that Equatorial Guinea is able to achieve the goals set for Horizon 2020. The Ministry of Mines, Industry and Energy, as the core of the development of the country, is making a huge effort to complement the program outlined by the government for 2020. It's true that there's much to be done, but honestly I think the country has achieved a lot, that's why we invite the investors to come and experience the real Equatorial Guinea, and watch what the country has done in just a few decades. Don't forget that Equatorial Guinea was one of the poorest countries in the world not 30 years ago. A 20-kilometre-journey in Equatorial Guinea used to take five or six hours. Today all cities are connected. This is the reality that investors need to see for themselves, so they have the confidence and tranquility to invest here.

We should not forget another very important element: the peace and good governance that exists in Equatorial Guinea. You can walk peacefully in the country, nobody will ask you where you're going or where you come from, you can do your business with no problem whatsoever. We have an enviable balance of freedom. That peace exists because His Excellency the Head of State, this is the most important element. I think the Guineans as much as our foreign partners need to find ways to preserve the good coexistence that we have in Equatorial Guinea.

The United States are more focused in Africa than ever, the proof being the recent US-Africa leaders summit attended by His Excellency President Obiang. What role could the United States play specifically in the mining sector, considering the great tradition of American companies in this sector?

I think the United States can play a key role. I say this because I think is better to have an old friend than a new one. The Americans have done everything you see now, they're the ones who came to establish a petroleum industry. They might have made their business and their profits, but look how they have left our country, how they have followed the instructions of our Head of State. If they've done this with the oil sector, why wouldn't they do it in the mining sector as well? This is why the United States remains our main customer and our main market, where we put our trust in. I think the American mining companies must come to Equatorial Guinea. We want to play together, revise the mining laws, and try to find points of alignment for the investors and the government, because they play a major role.

Equatorial Guinea is securely moving towards becoming a full member of the EITI (Extractive Industries Transparency Initiative).

Yes, the director of EITI has worked extensively with the civil society and other organizations, and maybe this year Equatorial Guinea could become a full member of EITI. We have done seminars, we have presented all our documentation so they acknowledge our transparency in the use of natural resources, and we are sure that by the end of this year Equatorial Guinea will be a full member. It is also one of the instructions of our Head of State: that Equatorial Guinea makes every effort to be part of that organization.

We know there are plans to involve the local personnel in the mining industry, so the sector could also benefit the Equatoguineans.

Of course, the Ministry of Mines, Industry and Energy has a Department of National Content, which is responsible for supporting and assisting the Guinean businessmen. This is what we have done in the mining sector, because American companies really support the Equatorial Guinean businessmen. Yesterday I came back from a region in the mainland where we opened schools built by companies in Equatorial Guinea, but funded by the oil and sand & gravel companies, according to the agreement between them and the Ministry. This is why the participation of Guinean entrepreneurs is so important. We are gradually doing this, because even though the local businessmen are already trained, they need to be trained even further, in the end they will inherit this country. We need our national companies, because they are main players in the building of this the country.

The mining sector creates many jobs, in the extraction stages as well as in all the associated activities, which really allows for the creation of a lot of SMEs.

Of course. The mining sector also needs to diversify, just like the oil sector. When you utilize a certain mineral, you also have to study that mineral and its possible added value. That's how we introduce the Guinean companies, so they can contribute to the development of the mining sector, just as they are doing in the oil sector. In a nutshell: the possibilities for development in our country are very ambitious, and I'm sure we will make them a reality. This is thanks to the teachings of our Head of State, which we find that are perfect, because we can see the results and that encourages everyone, it encourages our youth – with whom he really counts. I'm sure we will not disappoint him.


Given the global energy crisis, what message of confidence would you give to the international community, as a representative of the Ministry of Energy?

Indeed this is a very complicated context in terms of international policy issues, but I think it shall pass and we have a very positive time ahead of us. The price of crude oil is at its lowest right now, but history teaches us that it has already happened before and that it will eventually rise again. I think we need to work on solidarity and peace for everyone, and be careful with the terrorists - ranging either from right or from left - who always take advantage in these situations from those who work peacefully for their people, and create distractions so they can plant their bombs. I think my country is handling everything very well, we are following the instructions of our Head of State, we do not interfere in the affairs of other countries, and we hope the situation will improve as soon as possible. That is why I hope that Equatorial Guinea is not too affected by these major problems, because we want to live in peace, and that is what we are doing.



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