October 2013

Ready for takeoff

An insider’s perspective on Senegal’s growing mining sector

By Pierrick Blin and Antoine Dion-Ortega

After having worked for 15 years in Canada’s mining sector, Alioune Sarr moved back to his native Senegal in 1998 to continue his career there. He took up a post with the Ministry of Mines as the mining and geology branch’s head of division, project commission. Now the branch’s senior engineer, Sarr monitors and facilitates projects, coordinating mining projects from beginning to end. He has been a mining engineer for 30 years.

CIM: What are the major files you are working on these days?

SARR: We have been implicated in Teranga Gold’s acquisition of Oromin and its neighbouring concessions, where gold deposits were discovered. Informal gold panning is also keeping us busy in the Kédougou area, as we are trying to make it cohabit peacefully with neighbouring mining projects. Finally, we are working on a study on the legal and institutional framework of the Senegalese mining sector.

CIM: What kind of mining activity is going on in Senegal right now?

SARR: Senegal is divided into two geological zones. First, there is the sedimentary basin, where we find phosphate. Senegal has been producing phosphate since the 1960s. Taiba, a well-known company here, is exploiting these deposits. Phosphate production is entirely processed in Senegal into phosphoric acid and then exported to India, up to 600,000 tonnes annually. Other phosphate deposits have also been discovered, such as the Matam deposit in the northeast.

We also have an abundance of limestone that supplies our cement plants. In addition to the Sococim plant, two other plants are about to open, which will bring six million tonnes of additional cement to the market, making Senegal an exporter.

In the southeast Kédougou region lies the birrimian geological structure, where we find gold, and heavy and rare metals, et cetera. Teranga Gold is operating the first producing mine there, with 214,300 ounces of gold output in 2012 (p. 66). There are other discoveries, such as Oromin’s 1.1-million ounce gold reserve, and Bassari Resources’ project. It must be noted that the southeast is located in the same geological formation that has already proven its potential in Mali. That has helped us a bit.

CIM: Can you tell us more about the country’s zircon prospects?

SARR: Zircon is one of the heavy minerals found along the coastal belt in high grades of around two per cent. Senegal’s first zircon project, Grande Côte, is in its construction phase. It was launched by the Australian company Mineral Deposits Limited (MDL), which sold it to Tizir, a new company owned 50 per cent by MDL and 50 per cent by the French company Eramet. The project will produce about 100,000 tonnes of zircon and 600,000 tonnes of ilmenite per year, starting in 2014.

CIM: What is the government doing to support the exploration effort? What services do you offer?

SARR: Our task is to list discoveries in the mining sector for research and exploration. In 2007, we created the Mining Sector Support program (PASMI), initially for airborne geophysics. We produced geophysical and magnetic maps for exploration. Besides maps, in 2008 we launched the Mining Land Register and Documentation Centre (CDMC), whose mandate is to digitize mineral resources in Senegal. During the colonial era, the country had centralized all federal jurisdictions to Dakar, and so all the documents are located in the same place. We have already digitized about 100,000 of them. We will end up with a huge database, with valuable information for the industry. Finally, geography software was developed, which will help us manage mineral resources in the country.

CIM: What are the most significant elements of the mining code?

SARR: We are still working with the 2003 code, which is well detailed on our website and which consists mostly of tax incentives. We do not require anything at the exploration stage, which can be extended for up to nine years. At the moment, there is also a study being done on the regulatory framework and the institutional reinforcement of the ministry of mining. We are performing an assessment of the whole sector in order to produce a new mining code.

CIM: How does Senegal compare to other countries in the region?

SARR: They say Senegal is the gateway to Africa. It is a politically stable country compared to other countries, with access to the sea and a democracy enabling the development of many projects. Since 2000, the Investment Promotion and Major Projects Agency (APIX) has kept companies informed of business opportunities in Senegal. Finally, we have a very attractive mining code.

CIM: What is your strategy for the coming years? What are your main challenges?

SARR: A lot of new infrastructure is about to be developed, in particular a new mineral terminal about 40 kilometres from Dakar, the Bargny Port in Sendou, which will receive commodities from the mining sector for export. As for transportation to the port, we need to rehabilitate the Dakar-Bamako Railway that stretches across the country. In addition, there are new lines such as the Matam-Tambacounda Railway that need to be built.

CIM: How do you see the future of mining in Senegal?

SARR: Considering the intensity of current exploration projects, there will be new discoveries. Morocco has large phosphate reserves but only because the whole territory was subject to intensive surveys. In Senegal, we haven’t even explored one third of the sedimentary basin. So there is still a lot to come.

In the southeast formations, there are many investment opportunities, especially for gold. New infrastructure projects, such as the port and the launching of a new mining code, will further facilitate development in the sector. As for rare metals such as lithium, we have interesting indications that will need to be looked into. Finally, the government will soon resume discussions with ArcelorMittal to restart its iron ore project.

I think that conditions are in place for a fresh start in our mining sector.

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