#EarlySignals - June 2022
9 June 2022
Our monthly selection of news, quotes and figures that slipped through the radar but could have significant implications
Sierra Leone suspends the supply of foreign currency to mining and large companies seeking to import fuel.Since 1st June, mining companies operating in Sierra Leone have had to source their fuel with their own foreign currency reserves. This follows the decision by the Sierra Leonean authorities on 11 May to no longer provide foreign exchange to mining companies and other large businesses. The decision was driven by allegations that these companies were stockpiling significant amounts of fuel. In the first quarter of 2022, these businesses reportedly benefited from most of the USD 24 million in foreign exchange support provided by the Central Bank of Sierra Leone to facilitate oil imports. The rise in oil prices, prompted by the outbreak of the Russio-Ukrainian war, has significantly increased the weight of hydrocarbon subsidies for African countries. To cope with this additional expense, other African countries may follow suit by imposing strict measures on businesses. Burkina Faso, where some of the subsidised petrol is illegally re-exported to neighboring countries, could be next in line.
“I believe Mauritania has the vision to see through this volatility and become a major player on the world energy stage in the coming 5 years." Mr. Andrew G. Inglis, CEO, Kosmos EnergyThe CEOs of Kosmos, BP, Kinross Gold, CWP, and Chariot met on 24 May in Nouakchott to take part in a discussion on the country’s energy transition and the role of the private sector in accelerating it. The high-level meeting under the patronage of President Ghazouani is indicative of the executive’s long term ambition, and the authorities are doubling down on efforts to attract foreign investment to deliver this vision. Can the country's mining and gas resources compete with those of its African neighbors? For a start, the colossal Grand Tortue Ahmeyim (GTA) gas project, developed in partnership with Senegal, will make a significant contribution, with production slated for 2023. Mauritania also seeks to exploit its hydrogen potential, with several feasibility studies underway. In the coming years, the government intends to develop the exploitation of iron and gold and to accelerate the exploration of strategic minerals such as lithium, cobalt, copper, and uranium, among others present in the Mauritanian subsoil.