Senegal-West Africa is endowed with mineral resources, such as gold, iron ore, uranium, marble, chrome, etc. particularly in the Eastern region of Kedougou, an exceptional mining region.

In 2003, Senegalese government adopted a new mining code to attract Foreign Direct Investment (FDI). According to the senior officials of the Ministry of Mines, “this new code is intended to create a transparent, predictable, stable and nondiscriminatory framework that reduces transaction costs.”

The government’s option of promoting the mining sector is being irreversible. Thus at the First International Mining Exhibition Forum (FIMEF) held in Dakar on April 12th, 2010, the Director of mines said that “the current and prospective investment in the sector will reach US$ 5 billion from 2000 to 2013”.

The latest data of gold resources are laid down as follows: 75T in Golouma for OROMIN, 100T in Massawa and Niamia for RandGold Resource, 90T in Sabodala for MDL, and recently the exploitation license awarded to Bassari Resources/WATIC in Douta will produce 10,000 ounces/year.

Adding to that the soar in price of gold at the international market (250 US$ in 2000 to 1300 now), there is no room for doubt regarding the ambition of Senegal to be part of the restricted circle of big gold producers.

On the other hand, Senegalese mining code includes some interesting provisions on Corporate Social Responsibility, notably on environment and revenue sharing issues through articles n°55 and 82/84 respectively completed by the decrees n° 2009-1335 and n° 2009-1334 released on November 30th, 2009. These further provisions are an older request of CSOs which meant to set up two funds for the rehabilitation of degraded sites after mining closure and a 20% allocation of mining revenues to local governments.

Politically, Senegalese government is sensitive to environment and to social aspects of mining as well. In fact, “ (…)I will never accept that a company operates in a mining area while communities remain poor (…) All companies that operate in our country are committed to invest in social matters” said the President in his opening speech in front of about 50 mining companies’ representatives at the FIMEF.

However, things are very different on the field. Not only contracts are awarded in an opaque way, but also local communities are facing many types of harms and a lot of complaints still coming from the ground.  They are neither informed about any aspects of mining projects that can directly affect their livelihoods, nor involved in the management of revenues earned from gold operations. Meanwhile, the Social Mining Fund (about US$ 7, 2 million) which was set up in 2006 after manifold claims of CSOs is managed in a sectarian, unbalanced and cloudy manner that can’t allow citizens and local communities to hold the government and the mining companies accountable.

Furthermore, the decrees related to revenues sharing with local governments and environmental rehabilitation, are not implemented until now. There is no way for communities or CSOs to participate in the management and/or implementation process, due to a centralized framework in decision making.

In 2010, MDL an Australian mining company paid US$ 4 million of royalties to Senegalese government. But this payment is a bit weird and calls for more scrutiny:

  • First, the accuracy of the amount: the Ministry of Finance received only a check from the Ministry of Mines as payment of royalties without any form of written notification or explanation. There is no possibility for the Ministry of Finance to ascertain or assess the revenues’ flows themselves. Much worse, it is more suspicious since the Ministry of Mine denies outright any action for audit in the Sabodala gold project. Hence, the management system is not favorable for payment transparency;
  • Second, this amount do not provides any information about the other kind of payments owed to our country such as taxes, shares of production, rents and fees for license area, dividends and profit transfers, bonuses, asset sales. For example how much MDL has paid for the 10% of shares of the state?
  • Third, what is the share of the local governments and that of the rehabilitation fund? Will the government consider deducting this money from the global amount received from MDL?

For us, these are key points to consider in Senegal when dealing with transparency revenues in the extractive sector.

But in this context, the advocacy work of CSOs is weakening. Indeed, since the December 2008 riots in Kedougou region, things are at a standpoint!

Now, civil society groups are seeking to revive the EI transparency campaign with the aim to push the government to set up a clear and open framework on extractive revenues issue. Yet most of them lack expertise and commitment in this sector. This is a big challenge which calls for strengthening the capacities of CSOs and local governments’ representatives on the contents of the new decrees related to revenues redistribution and the funding of the rehabilitation of degraded sites after mining closure.

It is then crucial for an effective participation in the EI management and oversight of mining revenues that CSOs build a strong national coalition. This is the only way to ensure that our mineral resources are harnessed for the deeper and better interest of our Nation.