Equatorial Guinea’s heavy reliance on hydrocarbons to support its economy, mining and minerals are seen as a key sector to diversify national output, increase revenue generation and create jobs. The government sees the mining sector as an opportunity to diversify the country’s economy still hugely dependent on its oil and gas industry.
The mining industry of Guinea was developed during colonial rule. The minerals extracted consisted of iron, gold, diamond, and bauxite. Guinea ranks first in the world in bauxite reserves and 6th in the extraction of high-grade bauxite, the aluminium ore.
Economy of Equatorial Guinea has traditionally been dependent on commodities such as cocoa and coffee but is now heavily dependent on petroleum due to the discovery and exploitation of significant oil reserves in the 1980s. Equatorial Guinea enjoys a purchasing power parity GDP per capita of more than US$38,699, which is the highest in Africa and the 31st highest in the world as of 2016. In 2017, it graduated from “Least Developed Country” status, the only Sub-Saharan African nation that managed to do so alongside Botswana.
Growth nevertheless remains robust, driven by foreign direct investment (FDI) in the mining sector. The mining industry grew at an annual rate of roughly 50% in 2016 and 2017, while the non-mining sector posted a 5.4% growth rate in 2018, with investment in infrastructure and the expansion of the primary and tertiary sectors remaining strong.
Equatorial Guinea’s Ministry of Mines and Hydrocarbons has signed the very first mining contracts in the country’s history. Five mining contracts were signed with three different companies and follow the conclusion of the country’s first mining bidding round last year, EG Ronda 2019. The recent developments coming from Equatorial Guinea on the development of its mining and minerals industry are extremely positive and need to be welcomed and applauded.
The current mining code was drafted in 2006 and sets out the regulatory provisions governing the mining sector. Equatorial Guinea mining law is administered and enforced by the Ministry of Mines and Hydrocarbons who adjudicate all decisions and negotiate and sign all contracts between the State and 3 rd parties.
While Equatorial Guinea has seen early success in drawing bids for mineral exploration, ongoing concerns around corruption and a lack of transparency around the distribution of its oil revenues may be holding back its long-term aspirations in the mining sector.
Land ownership in Equatorial Guinea One of the main problems that can affect mining activities obviously relates to land ownership. The ownership of land includes the use, enjoyment and control over the surface, the subsoil and the airspace that covers them up to the limit established by law.
About 76.8 percent of the population lives in poverty in Equatorial Guinea. These circumstances make the people of this country extremely vulnerable to exploitation and trafficking. Could widespread criticism over corruption and human rights violations stand in the way of building a fair and profitable mining industry in the country?