Europe’s second largest economy, France has revealed plans to invest €400 million ($548 million) in establishing a new state-owned mining company called Compagnie National des Mines de France (CMF), with sub-Saharan Africa being looked at for significant investment.
CMF, another move by the government to revive the industry, marks the establishment of the European nation’s first new state-owned industrial enterprise in 20 years. The company will be built around the same model as Japan’s Oil, Gas and Metals National Corporation (JOGMEC) that was established a decade ago.
An annual budget of $150 million will be spread out over five to seven years while exploration and exploiting activities at the mine will focus on rare metals like lithium, germanium, tungsten, antimony and rare earths inside France and around the globe including former colonies in Africa, Central Asia and South America, French industry minister Arnaud Montebourg announced Friday.
“Francophone African countries, in particular, would like to work with us rather than do business with foreign multinationals;” Montebourg in an interview for French daily newspaper Le Parisien.
Two centuries ago, France used to be a major mining nation exploiting its own reserves of hard coal and iron ore, an era from which only metals group Eramet and the uranium business of state-owned nuclear firm Areva have survived.
Montebourg said CMF may partner with these two mining giants.
Areva which has two uranium mines – Cominak and Somair – in Niger, a French-speaking West African country has been facing operational challenges as the government wants to apply a 2006 mining law that ends tax breaks for foreign companies like Areva.
The miner currently pays 5.5 percent royalties on extracted ore as stipulated under deals Niger signed with France, its former colonial ruler, in 1961 and 1968.
Niger Mines Minister Tchiana said both parties are going to “pursue discussions until the end of February in order to find common ground.”