Mining Companies Flocking to Ivory Coast

Ivory Coast in West Africa has primarily been known as the world's largest cocoa producer. But the country's governments have taken various steps over the years to diversify the Ivorian economy, which has meant efforts to increase exploration and mining activities in the gold sector. More than 30 mining companies with global operations are currently exploring across the country. According to the government and industry experts, Ivory Coast had the potential to double its annual production of seven metric tons of gold in the coming two years. Some estimate that the West African country's total reserves of the yellow metal could be as high as 200 metric tons.

Fortunately, the political situation in Ivory Coast has calmed following the disputes surrounding the recent presidential election, and a growing number of multinational mining firms are intending to start operating in the country. President Laurent Gbagbo was defeated by his political opponent Alassane Quattara in an election in November 2010; but Gbagbo's reluctance to resign from office resulted in rioting and violence that left more than 2,000 people dead.

Michael Mian, president of the Interprofessional Mining Group and head of the Australian mining giant Newcrest Mining's Ivorian activities, believes that the country's gold production could double in the next two years. Besides Newcrest, the companies La Mancha, Cluff Gold and Randgold Resources are already running operations in Ivory Coast as well. Many more companies are planning operations in the country since the settlement of the electoral crisis - from which Quattara finally emerged as the winner. Numerous properties around the country are being explored, with many advancing along the road to production. According to the government, the richest mining areas are situated in the eastern part of the country.

Adama Toungara, who was named on June 1 as minister for mines, oil and energy, recently stated that the government intends to triple gold production in the next four to seven years. In order to reach that aim, the government needs to ensure continuing political stability. Street fights and violent riots between Gbagbo's and Quattara's political supporters took Ivory Coast to the brink of civil war earlier this year, resulting in shut downs of various mines across the country - among them Newcrest's Bonikro gold mine. The Ivorian government holds a 10% stake in Bonikro, which is situated in the country's south, close to Abidjan. Newcrest started production at Bonikro in 2008, mining 150,000 ounces of gold in their first year. Company estimates expect the mine to produce around 120,000 ounces per year in the future.

Due to the deteriorating security situation earlier this year, Perseus Mining also had to stop their exploration activities, while the Canadian company La Mancha has announced that output at its Ity mine will be highly dependent on a stable political environment. La Mancha estimates annual production of between 26,000 and 43,000 ounces of gold at Ity if all goes according to plan.

Ivory Coast's mining potential isn't limited to gold. The country also possesses reserves of other natural resources such as diamonds, nickel, cobalt, bauxite, iron and manganese. In order to increase their operations in the country, foreign mining firms are hoping that President Quattara delivers on his promise to foster peace and stability in the country.

Roman Baudzus is a contributing writer for GoldMoney.

Copyright GoldMoney (c) 2011. All rights reserved

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Roman Baudzus

Roman Baudzus is a contributing writer for GoldMoney.

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