Oct 9 2012
Topics Covered
Welcome to Central African Republic
Overview of Resources
Metals
Industrial Minerals and Gemstones
Fossil Fuels
Investment
Sources
Welcome to Central African Republic
Central African Republic (CAR) is a landlocked nation located to the north of Democratic Republic of Congo in Central Africa. The total area of the country is 622,984 km2, and it has a population of 5,057,208 as of July 2012. The country’s climate is mainly tropical.
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The national flag of Central African Republic.
Image Credit: CIA Factbook. |
Central African Republic became an independent nation in 1960. Since then it has had to deal with poor governance under various military regimes. The country is also plagued by militant activities and lawlessness in several parts.
Although the economy depends primarily on agriculture, the diamond industry accounts for 40% of the country’s export earnings. Central African Republic produces diamonds, uranium, gold, and oil. The GDP of the country in 2011 was $3.688 billion.
Overview of Resources
Central Africa Republic’s gold and diamond production is carried out mainly by artisanal workers in the regions of Haute-Kotto, Berberati, and Haute-Sangha. In terms of rough diamond production volume, Central Africa Republic ranked 14th in the world, and in terms of value it ranked 12th as of 2010.
Export and import statistics show that about $5.6 million worth of mineral commodities were exported to USA in 2010. Nearly $3.3 million of these exports were of rough diamonds. Import value from USA decreased in that year to about $10.3 million in comparison to $31.4 million in 2009.
The nation has many undeveloped mineral resources such as quartz, copper, iron ore, uranium, kyanite, lignite, graphite, ilmenite, manganese, monazite, rutile, salt, and tin.
The map of Central African Republic. Image Credit: CIA Factbook
Metals
In 2010, the Central African Republic government granted AXMIN Inc. of Canada a 25-year mining license to operate the Passendro gold project. AXMIN obtained 100% interest in the project. The feasibility study conducted by the company estimated that the average production from the mine would be about 6,400 kg/yr for the first 3 years and that the life of the mine would be 8.3 years. The study also stated that the total reserve in the mine was almost 31.5 million Mt.
Industrial Minerals and Gemstones
Since diamond mining can bring the government huge revenue, the CAR government is trying to establish proper management in the diamond industry. This process is difficult as many diamond mines are under the control of armed rebels, and also because there is a high level of corruption. Until the government can sort these issues, CAR’s diamonds will continue to be sold illegitimately.
Fossil Fuels
French company, Areva owning a uranium mine at Bakouma, has recently announced that its production will be suspended and only minimum operations will be carried out owing to the fall in yellowcake price after the Fukushima disaster in Japan.
Investment
Central African Republic has a long way to go before it can become economically self-reliant as it has to deal with a lot of internal issues. The following are some of the hindrances to speedy economic growth in CAR:
- Civil unrest
- Large group of unskilled labor
- Poor transportation
- Landlocked location
- Mismanagement of macroeconomic policies
The CAR government, however, is working towards promoting its mining sector and in 2010 it submitted its final validation report to the Extractive Industries Transparency Initiative (EITI) board. The EITI is a voluntary global organization that is incharge of ensuring good governance coupled with economic transparency and responsibility in the mining sector. The government’s commitment is evident as CAR was the first EITI compliant nation to publish its 2011 annual report.
Disclaimer: The Author of this article does not imply any investment recommendation and some content is speculative in nature. The Author is not affiliated in any way with any companies mentioned and all statistical information is publically available.
Sources