Côte d’Ivoire: new mining code reaps rewards

2019-04-18T09:16:09+00:00 April 18th, 2019|Country in Foucus|

Although there are challenges, Côte d’Ivoire is set to become a top-class mining country, writes Leon Louw.

Despite political uncertainties and risks, Côte d’Ivoire continues to attract investors. A new mining code introduced in 2014 with the aim of making the country more amenable for exploration and mining, has reaped rewards. The result is a growing list of junior miners and established mining companies settling in the West African state.

The country has one of the best port facilities in West Africa —Abidjan — and great strides are being made to improve road infrastructure. With a government keen to increase mining’s contribution to the gross national product, Côte d’Ivoire’s reputation as a world-class mining destination is gaining traction.

According to Ibrahim Danso, president at Groupement Professionel des Miniers de Côte d’Ivoire (GPMCI), which is the national minerals industry association, the mining industry currently accounts for almost 2% of the GDP growth. However, he adds, the goal is to increase that number to 10% in the next five years. “We expect to see the development of one new mine per year in the country for the next 10 years,” he says. Danso says that the 2014 mining code has resulted in substantial benefits to the mining sector, which is reflected best in production levels. From 2014 to 2018, manganese production, for example, has doubled from 300 000 megatons per year (mt/y) to 600 000mt/y. Furthermore, nickel production grew from zero to 800 000mt/y, while gold production improved with about 40% from 630 000 ounces per year (oz/y) to 900 000oz/y.

Major mining companies operating in Côte d’Ivoire include Randgold (now Barrick), Endeavour Mining, and Perseus Mining. Perseus started pouring gold at its Sissingué gold mine in January last year. Endeavour established the Agbaou gold mine in 2014 and still operates Ity, the longest-serving gold producer in the country, having started production in 1991. Barrick’s Tongon Mine consists of two opencast operations and produced 288 680oz of gold in 2017. Other gold producers active in the country include Newcrest, Centamin, Teraga Gold, and IronRidge Resources. IronRidge is also pursuing lithium deposits in Côte d’Ivoire. Smaller explorers include companies like Sama Resources, Kobo Resources, Toro Gold, Teranga Gold, and Orca Gold, who just announced a new resource on their Morondo property.

The possible return of former president Laurent Gbagbo is a cause of great concern among certain investors. Photo by new.yahoo.com

Political uncertainty

Despite the gains, there are certain concerns and challenges, including political uncertainty. Although the devastating civil war came to an end in 2011, relations between factions and interest groups remain cordial. According to risk management company Signal Risk, the potential return of former president Laurent Gbagbo is a cause of great concern.

In a 1 February ruling, the International Criminal Court (ICC) ordered the conditional release of Gbagbo, and co-accused Charles Blé Goudé. Both individuals were indicted on war crime charges in relation to the violence that ensued following Côte d’Ivoire’s 2010 elections.

According to a recent report by Signal Room, Gbagbo’s permanent release is not yet a certainty. Nonetheless, his provisional acquittal had an acute impact on the sociopolitical climate in the country.

“The most immediate of these reactions has come in the form of protests. Following Gbagbo and Goudé’s initial 15 January acquittal, demonstrations took place in Bouaké — the country’s second-largest city — where local youth groups held spontaneous gatherings calling for the ICC to reverse their decision to release the pair.

“The rally followed a similar demonstration held in Abidjan the previous day in which the pleas of protesters were for the court to not acquit either figure. Abidjan again hosted anti-Gbagbo protests in the Abobo area of the city and nearby Anyama on 31 January and 1 February, respectively, which — as was the case with the previous gatherings — caused localised disruptions but otherwise concluded peacefully.

“The protests were largely organised and attended by members of the CVCI — a civic movement which represents the interests of the victims of Côte d’Ivoire’s post-electoral crisis — but also drew the support of related organisations operating in the sector of human rights and victims’ justice. These groups have vowed to continue to resist all attempts by Gbagbo and Goudé to return to Côte d’Ivoire,” the report states.

Challenges remain

Unpredictability and regulatory uncertainty are concerns that negatively affect the mining industry. For example, the government recently intended to change the income tax exemption for operating mines from five years to one year. Although the decision was opposed, it could have severe ramifications. According to Danso, illegal mining is also a big challenge. “The government is trying to control the situation, but the plan is still a work-in-progress,” says Danso.

Tim Strong, the principal geologist at Kangari Consulting, was based in Côte d’Ivoire as an exploration and resource geologist for Amara Mining (now Perseus) from 2014 to 2016. The geological team was tasked with drilling out a resource (86 000m) of the Yaoure project, 40km north of Yamoussoukro. “At the time, this was the largest drilling campaign in Africa and included nine diamond rigs and two RC rigs at the same time,” says Strong.

Strong tells African Mining that the country has been relatively stable since the civil war ended in 2011. However, he adds that the situation could change very quickly. “There is strong opposition in the country. Moreover, areas to the north of Yamoussoukro have been plagued by bandits and criminal activity that have affected local people and expatriates, including senior mine personnel. This has caused some companies to scale back their exploration efforts in the centre and north of the country,” Strong says.

Endeavour Mining’s Ity Mine is the oldest gold mining operation in Côte d’Ivoire. Photo by Endeavour Mining.

Barrick’s Tongon gold mine consists of two opencast operations and it produced 288 680oz of gold in 2017. Photo by Barrick

Opportunities abound

It is important for companies looking to operate in the country to establish solid, trustworthy local contacts and have a presence in the country. Côte d’Ivoire is well connected and visas can be obtained on arrival. The development of new highways and flight routes make travelling around the country considerably easier than a few years ago.

Strong says that license applications can take a while to process, but there is considerable upside available for solid technical teams with access to capital to advance projects.

The Birimian gold deposits are structurally complex, and this requires a lot of technical expertise and a lot of drilling to be able to prove up a resource, which increases the overall cost of a project. According to Strong, there are numerous mining service companies in the country, including Geodrill, Capital Drilling, and Major Drilling, and adds that the local population is well educated and competent in the mining sector.

“Côte d’Ivoire is certainly less developed in the mining sector than its neighbours Mali, Burkina Faso, and Ghana, but shares a considerable amount of the same prospective geology. Since the end of the civil war, there has been a slow and steady rise in the number of companies working in the country and I believe there to be considerable untapped potential in the country for well-funded junior explorers, particularly in the gold space,” says Strong.

 The streets of Abidjan, where informal trade forms a big part of the growing economy. Photo by Nicola Theunissen.

The road infrastructure in Côte d’Ivoire has improved significantly over the past few years, which makes it a lot easier to do business in the country. Photo by Nicola Theunissen

Sought after mining jurisdiction

According to David Morgan, managing director at consultants Knight Piésold, Côte d’Ivoire has become a proven region of high geological prospectivity for gold projects. “Junior and mid-tier gold companies have been actively exploring and have enjoyed good success in the country over the past 10 years,” says Morgan.

Morgan says several factors have contributed to the elevation of Côte d’Ivoire as a mining hub. “Relatively easy access to historical geological databases and mapping have made the timing from initial exploration to successful development relatively quick. The capital Abidjan is a regional transport hub and provides good logistics for project support and development. In addition, the overall infrastructure in Côte D’Ivoire is pretty good compared with other West African countries, Morgan tells African Mining. He adds that the local population is well educated and keen to further develop their skills.

According to Morgan, political stability is still a concern. “Despite these interruptions, however, the overall political climate continues to improve. Government is generally supportive of the mining and gold sector, but further government support is required with respect to the tax and royalty regimes,” Morgan concludes.

Geology and minerals of Côte d’Ivoire

Almost the entire Ivory Coast is underlain by extremely ancient metamorphic and igneous crystalline basement rock between 2.1 and more than 3.5 billion years old, comprising part of the stable continental crust of the West African Craton. The rock types found are dominated by granulite and migmatitegneiss, with some granitoids and banded iron formations in remnant supracrustal belts. These rocks were affected by at least two orogenic mountain building events. The coast is marked by a strip of prominent recent sediments, extending offshore. Coastal sedimentary basins formed as a result of the rifting apart of the supercontinent Pangaea, during the opening of the Atlantic Ocean.

The oldest mining is related to gold and alluvial diamonds. Native gold is hosted in steeply dipping quartz veins near the boundaries of volcanic belts and sedimentary basins, in disseminated and massive sulfide deposits or as alluvial gold in river gravels. Gold is also found as paleoplacer alluvial gold and is included in conglomerates and sericite–quartz schist with grades up to 3g/t.

Diamonds have been found in alluvial deposits, south of Korhoga at Tortiya and at Seguela. Kanangone, Seguela, and Tortiya have kimberlite intrusions, but none have been found to contain diamonds to date. Iron is another important mineral for Côte d’Ivoire. The Monogaga deposit near Sassandra is a Minette Oolitic type iron deposit formed in the Miocene and Pliocene and has a 40% iron concentration. Mount Gao, Segaye, Tia, Tortro, and Klahoyo all have Lake Superior type magnetite deposits. In recent years, there has been an increase in interest in the high-grade manganese deposits. The manganese occurs as carbonates, silicates, and oxides and reaches concentrations of up to 47% in lenticular bodies, in the north-western regions of the country. The underlying phyllite and gondite became enriched in manganese near the Blafa-Gueto hills and Mokta, forming the residual caps.

The tropical weathering products and resulting clays are also of importance as it contains laterite deposits. Biankoumo has nickel-rich laterite soils on top amphibolite gneisses, close to the border with Guinea. These nickel deposits contain an appreciable amount of cobalt. West Africa is also known for its bauxite deposits and Côte d’Ivoire hosts significant deposits, although not as large as neighbouring Guinea.

The country is endowed with a large number of other mineral deposits that have not been developed in most cases. These range from nickel–copper deposits associated with platinum group minerals to beach heavy mineral sand deposits of titanium, tantalite, and glass sand. There is also modest offshore oil and gas reserves.

Source: Nicolaas Steenkamp, independent geological consultant.