While demand for crude oil has plummeted due to COVID-19, production of minerals including graphite, lithium, cobalt, aluminum, copper and nickel, is expected to rise, potentially increasing by nearly 500% by 2050, according to a recent report from the World Bank Group.
As a result, African countries such as Equatorial Guinea are harnessing opportunities to create local industry around the exploration and production of minerals, which could help meet growing demand for clean energies.
In 2019, the Ministry of Mines and Hydrocarbons held its first public tender for mining acreage in the country. EG Ronda 2019 garnered interest from 53 international and national companies, with 17 companies submitting official bids and seven companies awarded concessions for nine blocks.
To further drive the development of a domestic mining sector, the country adopted a new mining regulation in early May and proceeded to sign five exploration and prospecting contracts later that month. In signing first contracts, Equatorial Guinea aims to exploit resources in the highly prospective Rio Muni region, which contains gold, diamonds, base metals, iron ore and bauxite, among other minerals.
“Equatorial Guinea is getting serious about developing its mining industry, and we applaud that move,” stated Leoncio Amada Nze, President for CEMAC at the African Energy Chamber. “The country has tremendous minerals potential, and the development of a value-chain for mining, from services all the way to processing, could generate thousands of jobs for Equatoguineans, create new associated local businesses, and new economic centers bringing business activities closer to rural areas along with other ripple effects in the economy.”
Last November, the Ministry of Mines and Hydrocarbons also signed a Cooperative Agreement with Russian geological research company Rosgeo and Venezuelan state-owned oil company PDVSA for the study of prospective onshore mining area on the country’s mainland.
Equatorial Guinea’s efforts to create a local mining industry align with its strategy for economic diversification that was established during its Second National Economic Conference and aims to create a sustainable, diversified national economy outside of crude oil exports.
Under the 2020 Year of Investment, the Ministry of Mines and Hydrocarbons is promoting several key projects in the mining and minerals industry and that span the entire energy value chain, including an industrial mining area with a gold refinery.