Algeria to create state mining group: minister

Tue Dec 7, 2010

ALGIERS (Reuters) - Algeria said on Monday it would set up a mining group to consolidate state-owned assets in the sector.

The announcement, made by Energy and Mines Minister Youcef Yousfi, appeared to be part of a government policy of giving a greater role to domestic firms and creating state-run national champions in strategic sectors of the economy.

"We will create a mines group. There is a huge development program for this sector," Yousfi told a conference in the Algerian capital.

Gold miner GMA Resources and zinc miner Terramin Australia are the biggest foreign investors in Algerian mining since the government opened the sector to foreign investment in 2001.

GMA has been operating the Amesmessa-Tirek mine, Algeria's main gold mine, while Terramin has started exploiting a zinc and lead mine.

OPEC member Algeria is a major exporter of oil and gas but its mining sector is under developed. It is potentially attractive to investors because of its close proximity to European markets. The country mines mostly gold, zinc and iron.

The government has over the past years launched several licensing rounds allowing foreign firms, including many from China, to acquire mining concessions in partnership with local firms.

Under Algerian law, the stake a foreign company can hold in any investment is limited at 49 percent.

Foreign investors have been operating in Algeria in partnership with several small, state-owned mining companies overseen by National Agency of Mining Patrimony, a department at the energy and mines ministry.

Source: Reuters.
Link: http://af.reuters.com/article/investingNews/idAFJOE6B605620101207.