Background statistics

Area: 1,284,000 km²
Population: 6.9 million (1997)
Population growth rate: 2.8% (1994)
Currency: Franc CFA: US $ 1 = F CFA 590 (Nov. 1997)
Inflation: 5.5% (1997 estimate)
Official languages: French, Tourkou (Chad Arabic), Sara
Value of exports: US $ 236.3 million (F CFA 121,710 million)(1996)
Value of imports: US $ 254.6 million (F CFA 131,110 million)(1996)
Trade balance: US $ 18.3 million (F CFA 9,400 million)(1996)
Main exports: Cotton fibre (50%), livestock, gum arabic
GDP: US $ 1,169 million (FCFA 602 billion) (1996)
GDP per cap.: US $ 174 (F CFA 89,371)(1996)

Physical Geography

The territory of the Republic of Chad covers the eastern half of the large Lake
Chad basin and the southern edge of the Koufra basin (Lybia) – called the ‘Erdis
Basin’ in Chad). Their edges reach an altitude of 1,500 m to the East (Ennedi) and
3,400 m to the north (Tibesti). The lowest altitude in Chad is in the regions of
Djourab and Bodelé, at 155 to 180 m. The current Lake Chad, which has a depth
between 4 and 7 metres, is at a higher altitude (about 280 m). The edges of the
basin make different landforms: plateaux to the south, sandstone and granite hills to
the east, high plateaux and volcanic highs to the north (highest point at 3,414 m,
Mount Emi, Tibesti).
The Chad basin has a deficient hydrographic make-up. The only permanent river
system is that of the Chari River and its tributary, the Logone River, which
originates in Cameroon (Adamaoua massif) and in the Centrafrican Republic).

History

Chad, a former French colony that became independent in 1960, has had a very
agitated period for more than 25 years, including social unrest, political coups and
border wars, which has precluded it from developing its territory. Under the
leadership of Colonel Idriss Deby, a new regime began in N’Djanéma in 1991. A
democracy is in the making in this troubled context, as demonstrated by the
creation of political parties (about 40 altogether) and the emergence of a free press
and of a variety of public organisations, amongst which the Human Rights League is
the most active. The difficulties of governments and the slow worsening of the
government structures have resulted in a worsening of the financial situation in the
country and in the onset of an economic crisis which creates more and more acute
social tensions. Political uncertainty, financial and economic crises, and the risk for
serious social unrest, characterise the current situation.

Population

Ethnic groups in Chad are numerous and are distributed unevenly across the
country. We can distinguish, in very general terms, between the southern agriculture
based people (Saras), the central livestock raisers (Arabs, Peuls, Baguirmians,
Kanembous), the people who rely mostly on fishing (Kotokos, Boudamas) and the
Sahel region people (Toubous) who are essentially nomads who live from their
camel herds and from general trade. The majority of the population of Chad is
located in the major urban centres (estimated 1997 population): N’Djanéma, the
capital (650,000); Mondou (120,000); Sarh (100,000); and Abéché (80,000).

Physical Infrastructure

Chad is a participant in the multinational airline Air Afrique. The interior of Chad is
served by Air Tchad, which links the international airport of N’Djanéma and some
of the 12 airports located across the country. N’Djanéma is linked to Europe by a
regular schedule of passenger and cargo flights of Air France and Air Afrique.
Navigation on the Chari and Logone rivers is important because there is no railway
in the country. The road network, totalling some 8,000 km, is comprised of earth
and laterite roads, including 4,000 km of main roads of which 280 km are paved;
about 22,000 km of trails complete the ground transportation network. The capital
N’Djanéma is linked by a paved road to the ports of Douala (Cameroon), about
1,550 km away, and Port-Harcourt (Nigeria), 1,400 km away. N’Djanéma has a
respectable hotel infrastructure of international calibre.

Economy

Chad’s economy remains very fragile, as it is insufficiently industrialised and its
financial sector is not well developed. It is largely dependent upon food production
in one form or another. For example, about two thirds of the population is involved
in agriculture and in nomadic livestock raising, activities which together contributed
about 45% of the country’s GNP in 1996. Chad suffers from a very slow industrial
development resulting from the high price of energy. The industrial sector, which
has begun improving as a result of the improvement of the cotton markets, consists
in a large para-governmental company, in public and para-governmental medium
enterprises, and in micro-enterprises working within the informal economy. Chad’s
economy, and in particular its foreign trade, has been strongly dependent to date on
only one industry - cotton - which is subject to the variability of the international
markets. It generates about 65% of the foreign currency revenue of the State. The
services sector is dominated by a very large and unstructured informal segment.
The destruction caused by war and political unrest has slowed down development
of the economy, which had regained in 1990 its 1977 level.

The mining sector in Chad is under the responsibility of the Ministry of Mines, Energy and Petroleum, which has several divisions, and of mixed companies under the control of the State. The part of the ministry which oversees activities related to minerals and energy is the Direction Générale, which itself has three components, one each for petroleum (Direction du Pétrole), energy (Direction des Energies), and mining and geology (Direction des Mines et de la Géologie).

Division of Mines and Geology
(Direction des Mines et de la Géologie – DMG)

The DMG has a multifunctional role: it manages and implements Chad’s mineral resources policy, manages the mining sector, oversees the exploration and mining activities, and develops strategies for the development of the mining sector. The DMG has three departments (Services), for Geology (Service Géologique), for mines (Service des Mines) and for geochemical analyses (Laboratoire d’Analyses Géochimiques). It also serves as a host organisation for partners, whether they are private or represent international aid organisations or national co-operation organisations. Thanks to the support of UNDP, the DMG also serves as an intermediary for investors. At present, it is well equipped in vehicles and logistics support, a drill rig, a geochemical analytical laboratory (soils, rocks), a petrographic laboratory, as well as a modern documentation and mapping department. Its personnel is trained in field prospection and exploration techniques, and in data collection, processing and interpretation, which gives them the tools required to fulfil their mandate.

Legal framework for mining related activities

In Chad, the mining legal framework is the same as that of the industrial sector in general, which falls under the following laws:
the Investment Code (Ministry of Commerce and Industrial Promotion)
the General Tax Code (Ministry of Finance)
the Customs Code (Ministry of Finance and Information)
the Labour Code (Ministry of Public Service and Labour)
the Environmental Code (Ministry of the Environment and Tourism)
In addition, to be consistent with changes that have occurred in the international mining industry and with the firm intent to involve foreign investors in the development of the country’s mining sector, Chad aims at developing this economic sector. A new Mining Code for Chad has been drafted in June 1995 to replace the 1970 code. The new legal framework encourages the development of a competitive mining sector. Its objective is to attract foreign investors to develop the country’s mining industry. From a legal viewpoint, there is a distinction between ‘various materials’ and ‘mining substances’ (previously named ‘quarry materials’ and ‘concession substances’). Exploration and mining activities for mineral substances are controlled by permits and legal titles, which include: In order to obtain a permit or a mining title, one must have created a Chadian company.

Exemptions from taxes and duties

Permit holders, their suppliers and associates are subject to the Customs Code, unless special terms are set by a Mining Agreement: the equipment and machinery, and their spare parts, provided they are used for prospecting and exploration work, are exempt from custom taxes and duties as long as they are used for such purpose. Imported materials and consumables used exclusively for prospection and exploration work, as well as the personal belongings of expatriate personnel and their families, are also exempt from custom taxes and duties. However, fuel, lubricants and other petroleum based products are subject to these taxes.
Tax on profits

Permit holders, their suppliers and associates are subject to the General Tax Code, unless special terms are set by a Mining Agreement: the current tax rate is 45% but when applied to mining activities, the effective rate is negotiable within the framework of a Mining Agreement. Also, considering the special characteristics of activities of the mining sector, that is, the risk involved and the large amounts of funds to be invested in exploration and in the development of mineral resources, such activities benefit from a particular regime aimed at providing incentives in this sector. A number of deductions are allowed on profits made. These are usually in force in industry.

Foreign exchange rules

The principle on which foreign currency is treated is that – unless prior authorisation was obtained from the Ministry of Finance and Information - all transactions involving foreign currency exchange, the movement of capital and all other financial transactions between Chad and a foreign country, or in Chad between a resident and a non-resident, must be carried out through the Central Bank, the Post administration, or a bank that has been authorised to carry out such operations. The investor, the borrower, the importer or exporter must deal with these authorised intermediaries when presenting the Ministry of Finance and Information any required official request for the appropriate transactions. The free conversion of Chad currency into a foreign currency is guaranteed for permit holders and their expatriate personnel, within the framework of the treaties establishing the Zone Franc and the UMEAC (which includes Chad, Cameron, the Centrafrican Republic, Congo, Gabon and Equatorial Guinea). With the proper authorisation from the Ministry of Finance, the same permit holders can open and use foreign currency accounts outside of Chad for their foreign currency transaction needs.

Foreign investment rules

According to the Investment Code, a company can be subject to a particular fiscal regime (called ‘Regime D’) if the activity involved is judged to be of great importance to the economic and social development of Chad, and if the investments involved are greater than F CFA 2.5 billion. This regime can be applied for a maximum period of 20 years, plus installation time. It includes a long term fiscal regime which guarantees to the company stable tax rates, tax contributions and other fiscal parameters, which are applicable starting with the establishment of the company.
Among the benefits of such a regime, one can note: the exemption from property taxes, total or partial exemption on import duties, on primary materials required for operations, on exports, and temporary exemption on income tax for the company personnel and for the company itself. Also, deductions are allowed when profits are invested in the construction of buildings or in the purchase of equipment and machinery. At the end of the exploration and exploitation activities, the foreign permit holder can transfer out of the country, in its totality, the gains from the liquidation of the operation and the realisation of its assets.
Procedures for requesting a mining title

a) Request for a permit for prospection or artisanal mining:
1. prepare a request file for each property, including: the appropriate completed form, 1 location map on the official topographic 1:200,000 scale map showing the extent of the property under consideration, fees (F CFA 100,000);
2. submit file at DRGM in D’Jaména;
3. the file will be transmitted to the Director of Mines, who will arrange for the permit.
b) Request for an exploration permit:
1. prepare a request file for each permit, including: the appropriate completed form, 1 location map on the official topographic 1:200,000 scale map showing the extent of the property under consideration (max. 200 km²), required information about the applicant, work plan and budget for the first year, fees (F CFA 100,000), and a proposal for a Mining Agreement (foreign applicants);
2. submit file at DRGM in D’Jaména;
3. the file will be transmitted to the Director of Mines, who will arrange for the permit;
4. evaluation of the file by the Ministry, negotiation, finalisation and signing;
5. delivery of permit after signing of the agreement, for 5 years, renewable

Chad is located within a vast domain between the Congo Craton to the south, The Western African Craton to the west, and the Nilotic Craton to the north-east. It is mainly comprised of two geological units: the crystalline rocks of the Precambrian basement, and the sedimentary cover. The oldest rocks, the Precambrian granitoids and metamorphic rocks of Tibesti in the north, Ouaddaï in the east, and of the Guéra Massif and Mounts Lam in the south-east, are located at the periphery of the two basins, the Erdis basin, which is an extension of the Lybian Koufra basin and of the Lake Chad basin. They have been subjected to major orogenic events (Pan-African orogenies towards the end of the Proterozoic, 600-650 Ma.). numerous mineralised indices have been noted on the Chad territory during the last decades, with more indices identified by the recent UNDP/DRGM project, in particular gold and industrial minerals.

Precious metals and minerals

Diamonds
The main regions for alluvial diamond production in Chad are Abéché, Biltine, Am Zoer and Adré in the Ouaddaï, as well as Melfi-Bitkine in the Guéra. Also, local prospectors have found alluvial diamonds in many regions, including Melfi, central Ouaddaï and in the Lim River in Baibokoum. This region is to the extreme south of the country and presents a geological context similar (Precambrian basement) to that across the border in the Centrafrican Republic and in Cameroon, where artisanal mining of diamond in gravel is being carried out. Because of this, we are optimistic that diamonds can be discovered in this region in the future, as well as their primary source deposits. Until now, however, no primary source of diamonds has been discovered, nor have kimberlites or magnetic anomalies indicative of kimberlite pipes been found.

Gold
Gold exploration in the last few years has focused on the Precambrian formations of Ouaddaï, Guéra and Mayo Kebbi. The excellent gold potential of Mayo Kebbi has been known since the 1940’s, but it was not until 1987 that a significant geochemical survey was carried out in the volcano-sedimentary greenschists of this region, during the UNDP/DRGM project. Two locations have been identified where gold has mineralised meta-sedimentary formations and is also contained in quartz veins. At the same time, a rich alluvial deposit was discovered. The artisanal exploitation of gold in these sediments of the Mayo D’Dala River in the Mayo Kebbi region has started in 1992. A few permits for artisanal mining have been granted to small local companies which now mine these deposits using local manpower. The extent of the production is unknown. The project also identified, in the southern part of the Ouaddaï region, about 40 gold anomalies of which four appear to be very promising; quartz veins are also found in the volcano-sedimentary schists in this area. Although not well documented, the gold potential of the Tibesti region is real, as gold nuggets have been found in alluvial deposits in the Aozou region, above a basement of Lower Tibestian age. The geological context is also very favorable to the discovery of other gold indices and deposits, in particular of the type associated with Proterozoic volcano-sedimentary formations (Tibestian).

Bulk minerals

Iron
Several iron deposit types have been mined in the past. The reserves of these deposits were never evaluated. Iron quartzites of Precambrian age are found in Hadjer Hadid, near Gourgoundji, in the Ouaddaï region; the iron concentration is high but the ore also contains Cr and Ti. Hematite-bearing schists are abundant in the Koukou Angarama region in the south of the Ouaddaï; iron grades there are around 20%.Oolithic iron formations are found in thin units (60 cm) near Tilé Nougar at the extreme south of the Guéra region, north of Sahr. Also, iron is found in several locations in lateritic caps, especially in the Mayo Kebbi.

Industrial minerals

In Chad, an important informal sector exists for the mining of minerals easily accessible from the surface, such as sodium, salt, clay, etc.

Diatomites
Chad has very important reserves of diatomites, some of which are of good quality. The diatomic deposits, which result from biochemical sedimentation that occurred along lakes in the Pleistocene and Holocene, outcrop in a large area (greater than 115,000 km²) spreading between Lake Chad and Fade. Thickness of the diatomite beds varies between 2 and 15 m, and these formations either outcrop or are covered by only a few tens of cm of overburden. Reserves are estimated at about 3 billion tons.

Kaolin
The better known kaolin deposits are those of Abou-Deïa, S-SE of Mongo in the central massif. Two deposits are known which have developed by alteration of vein formations limited by faults. The Djougro deposit, which is 7 to 8 m thick, is several tens of meters long; its reserves are estimated at 25,000 tons; the quality of its minerals is suitable for the production of porcelain, tiles and other ceramic domestic articles. The Bourmataguil deposit apparently contains more important reserves (500,000 tons) but its quality is unknown. Other kaolin indices have been noted in the southern part of the country.

Sodium
Chad is well endowed with large reserves of evaporate deposits, in particular of sodium (about 650,000 tons of sodium are believed to be deposited each year) and halite (salt). Around the BET area (Borkou, Ennedi, Tibesti), sodium is found in sebkhas such as those of Ounianga Kebir, Ounianga Seghir and Ouadi Doum, where it is deposited on the surface above sands - like immediately south of Faya - and also in the volcanic craters of the Tibesti (‘Sodium Holes’). In the other sodium bearing region, between the border with Niger to Doum-Doum and north of Lake Chad (Kanem), sodium has accumulated in depressions between dunes along the shore, in a band about 25 km long. Several hundreds of depressions contain sodium carbonate deposits, especially gaylussite and trone. The local population produces about 12,000 tons of sodium per year using artisanal methods, primarily in the Liwa-Kaya region. About 70% of this production is sold in neighbouring countries, in particular in Nigeria, where it is used in areas of livestock raising. Commerce has been established around this resource and involves sometimes transportation over large distances – by boat or by camel – but trade is mostly done by barter, without money involved.

Salt
Salt is, like sodium, exploited using artisanal and traditional methods in the Borkou salt pans. The largest concentration of salt (NaCl) is found in the districts of Borkou and Ennedi in the northern part of the country. Between Faya and north of Fade, 15 large sebkhas grading 22 to 91% NaCl cover an area about 20 km² large. Pans are found in sets of 1 to 4 over an area 0.2 to 2 km. The highest NaCl grades seem to be found in Démi, Oueta, N’Teiguei, Bédo and Orori, and their reserves appear to be renewable. Production is about 250,000 tons/month of evaporated water. The production in the BET area would be sufficient to meet the demand of the whole country.

Glass sand
Sand which appears to have a quality of interest to the glass industry has been noted in several drill holes in the Quaternary formations of Chad. For example in Chiguek, between Ati and Oum Hadjer, a drill hole has revealed a unit of pure white sand made of millimetric quartz. In Batanagdé, in the NW area of the Batha region, another drill hole intersected 18 m of white sand.

Construction minerals

The mining of quarry materials for buildings and public works includes: silt, clay, and laterite in several areas of the country; sand and gravel in the Logone and Chari rivers around N’Djanéma; and clay and granulates.

Clay
Clay is used traditionally as a construction material for bricks over the whole country. Brick manufacturing is usually done locally and no extensive commercial activity has developed as a result. A few years ago, a ONUDI/UNDP/DRGM project introduced in Chad the artisanal manufacturing of fired bricks and raw bricks stabilised by cement.

Limestone
Large reserves of limestone have been found in the Mayo Kebbi, Guéra, Ouddaï, and Ennedi regions, as well as north of the Tibesti and in the Ténéré regions. A pre-feasibility study on a limestone deposit in Baoré (Mayo Kebbi) has shown that Portland cement could be manufactured at a 50,000 tons/year production capacity.

The only resources currently being mined in Chad are minerals such as limestone for lime production and rhyolite for granulate production. Limestone is mined in the Louga (Mayo Kebbi) quarry, where lime is produced using artisanal methods. Mining is carried out by SEMPA (Société d’Exploitation Minière de Pala) and its product is sold under the name ‘Pala Quick Lime’. A limestone of superior quality (about 50% CaO) was also mined from time to time for the artisanal production of lime, near Tagobo Foulbé (Mayo Kebbi); reserves are estimated at 90,000 tons.

Granulate
Granulates are produced from the rhyolite of the Mani quarry (Dandi, Hadjar Bigli), southeast of Lake Chad; mining is carried out by SOTEC.

Marble and ornamental stones
The UNDP/DRGM project has identified several promising marble deposits in the Mayo Kebbi region, near Guéra and Ouaddaï. The Teubara and Biké deposits (Mayo Kebbi) form lenticular bodies 150 to 200 m long. The valorisation of this marble, which of medium quality, requires additional work. Good quality marble has been discovered in Zoubou, in the Guéra region: its color varies from white to grey, sometimes pink. In this deposit, horizontal blocks are laid down in fields 50 to 400 m long and about 20 m wide. The structure of the deposit remains unknown. Detailed surveys are required before the Zoubou deposit can be exploited. In Zafai, Rey and Modo, near Goz Beida in the Ouaddaï region, reserves of marble have been estimated at 3.5 million cubic meters altogether. These deposits are considered economical both from their size and quality.

MINERAL PRODUCTION AND MINING COMPANIES

Mineral production (1995)
Product Production
Value (US$ 000´s)
Alluvial gold
Limestone none
Sodium 13.000 t
Granulate 175.000 t
Gravel 100.000 t

Suppliers of services to the mining sector

Drilling: COFOR Forages, DMG, HYDROTECH, Steche
Laboratory and technical: Halliburton Gephysical Services, HYDROTECH
Consulting: DGM, HYDROTECH, (CEGMA)
Suppliers: none
Training: none

Email: cbharmon@go.com