Gov't suspends 38 mining contracts to fight smuggling

The Cameroon government has suspended contracts for 38 of the 125 mining companies operating in the West African nation, accusing them of opening the way for the smuggling of diamond and gold by traffickers, who could sell the gems to neighboring countries, secretary of state at the mining ministry, Gentry Calistus Fuh, said on Thursday.

“Those with valid contracts are companies operating in the diamond, iron ore, bauxite, cobalt, nickel and marble,” said Mr. Fuh, who didn’t identify the companies sanctioned.

Citing ministry figures, he had told Dow Jones Newswires last week that 140 gold deposits are spread out over 20,000 square kilometers in the country, which expects 16,653 kilograms of gold output from small scale miners between 2010 and 2015. But some 90% of the gold produced goes to traffickers.

Revenue from mining contributes only 1% to the country’s gross domestic product, as just two mining companies have exploitation licenses, with the rest exploring for minerals. But the Cameroon government wants to transform mining into a mainstay of its economy.

Cameroon has found it hard to control trafficking of gold because 40% of 6,000 mining permits in the country are in foreign hands as a result of cash-strapped Cameroonian artisanal miners’ reselling their licenses to foreigners.

This year, Cameroon created diamond monitoring units around its borders and airports after it became a member of the Kimberly Process in 2013.