The findings of the state-run geological survey unit will allow the sector to expand

There is more than just oil and gas under the desert sands of Algeria. Last year, the first ever gold bullion was poured in the country and plans are in hand to further develop the gold mining sector.
Gold has been exploited in Algeria since Roman times, but never on a large commercial scale. Several of the major deposits were located in the 1970s, but mining development was held back by a number of factors including restrictions on co-partnership, geographical distances, bureaucracy and, more significantly, the fact that most investment went into the oil and gas industry.

Recent new mining laws now permit foreign investors to prospect for gold and other minerals such as diamonds, and to establish mining operations. A number of financial incentives are available to encourage potential investors and interest has already been expressed by several foreign mining companies. South Africa’s giant De Beers, for example, has signed an agreement to carry out research and development of diamond deposits.

Mapping programme has uncovered new mineral resources

To exploit Algeria’s gold the Enterprise d’Exploitation des Mines d’Or (ENOR) was established in 1992. The main shareholders in ENOR include state energy giant Sonatrach, the Bank of Algeria, the Algerian Insurance Company and the National Non-Ferrous Mining Products Company.

The first bullion produced by ENOR came from the Tirek gold mine in the south of the country. Both this and the Amesmessa mine 50km further south are believed to contain roughly the same volume of gold as similar gold-bearing regions elsewhere in the world, such as Kalgoorlie in Australia, the Black Hills in the United States and Enissei in Russia.
The opencast mine of Tirek has been in production since July last year. There are proven gold reserves of more than 380,000 oz and estimated further reserves of about 200,000 oz. At Amesmessa, proven reserves total more than 900,000 oz with further reserves of 700,000 oz.

‘Transparent conceding of mine titles’ Mohamed Bouarroudj

The Office National de la Recherche Géologique et Minière (ORGM), the state-run geological survey unit, is busier than ever following the liberalisation of the mining sector. And it is not only gold deposits that ORGM has mapped.
Mohamed Bouarroudj, its chairman and managing director, says about four-fifths of the most significant areas of Algeria for prospectors have been mapped. “The mapping programme has enabled us to discover several new mineral resources such as iron, phosphates, kaolin, zinc and lead. These new findings will enable the mining sector to expand,” he says.

Foreign investment is sought to develop zinc and lead mining at Oued Amizour, as well as that of other mineral deposits. More than 100 exploration and mining concessions have been granted, mainly to small and medium-sized enterprises.
“This list is not exhaustive,” says Mr Bouarroudj. “I am convinced that mining activity will be intensified through the injection of private capital.”
ORGM is halfway through a three-year exploration programme, and can assist potential prospectors. Foreign investors have been able to prospect and establish mining operations since July last year.

“I think one of the most important points is to treat investors, both national and foreign, whether public or private, in the same way. Another important point is that the conceding of mine titles is done in a transparent way,” says Mr Bouarroudj.
“Thirdly, I should point out the many financial and fiscal advantages granted to investors and the sector’s stability.”
Two new agencies have been created to deal with the expanding mining sector – one to handle promotion and the granting of mining titles, and the other which will run the national geological service’s activities of mapping and database management, mine registrations and supervision.

Mr Bouarroudj adds: “In the short term (2000-2003), the state is financing ORGM’s exploration programme. During this period, ORGM is being restructured to adapt to the new changes and economic conditions of the country. The restructuring has already begun with the creation of Aquamines, which specialises in hydro-geological drilling, a very promising market in Algeria thanks to development programmes in agriculture and the need to meet the increasing demand for water.”
ENOR chief executive Ali Nouiova says: “The mining sector has been neglected because the priority of the state was develop the oil and gas and petrochemicals sectors. Reforms had to be made and in the past five years there has been a lot of goodwill to help the mining sector grow.”
He adds: “There’s good potential, because Algeria is still under-explored, both for minerals and hydrocarbons. There are a lot of gold resources – they just need to be exploited.”