RETURN TO I~ETUN TORESTRICTED REPORTS DESK WITHIN ReportNo. To-zo5a ONE WEEK FIE COPY This report was prepared for use within the Bank. In making it available to others, the Bank assumes no responsibility to them for the accuracy or compl eteness of the information contained herein. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT APPRAISAL OF THE COMILOG MANGANESE MINING PROJECT (REPUBLIC OF GABON) June 17, 1959 Department of Technical Operations FILE COPY Currency Equivalents $U.S. 1 - F.Fr. 493.7 F.Fr. 1 billion - $2,025,522 1 C.F.A. Fr. - 2 F.Fr. All tons are metric tons unless otherwise specified. APPRAIJÅL, OfjM3 C OI LOG MANGANESE MINING OROJECT (REPUBLIC OF MSBON) TAP IE OF CONTF TS Faragraphs SUMARY AND COCLUSIONS , . . . . . . . . . . . . i - vi I. INTRODUCTION . . . . . . . . . . . . . . . . . 1 - 2 II. TIB B0PROWER . . . . . . . . . . . . . . . . . . 3 - 9 A. Ibh3 Compmjy . . . . . . . . . . . . . . . . 4 - 8 B. Magonet . . . . . . . . . . . . . . . . 9 III. THE PRCJT . . . . . . . . . . . . . . . . . 10 -36 A. Gereral . . . . . . . . . . . . . . . . . . 10 B. Projetc Details . . . . . . . . . . . . . . 11 - 36 1. The Mina . . . . . . . . . . . . . . 11 - 17 2. The Cablory . . . . . . . . . . . . 18 - 21 3. The Rei:rad . . . . . . . . . . . . 22 - 26 4. The Port . . . . . . . . . . . . . 27 5. General Services . . . . . . . . . . 28 6, Present Statuj . . . . . . . . . . . 29 7. Construction Schedule . . . . . . . . 30 8. Frocur5m,nt . . . . . . . . . . . . . 31 - 32 9. Lbor Rtquirements . . . . . . . . . 33 - 34 10. Cs . . . . . . . 35 - 36 1. roduction Cost Estimates . . . . . . 37 - 38 IV. MAREFTIG id MRKETS . . . . . . . . . . . . . 39 - 44 A. MYrketing Arrangements . . . . . . . . . . 39 - 41 B. The Market . . . . . . . . . . . . . . . . 42 - 44 V. FINANCING PLAN AND FINANCIAL PROSPECTS . . . . . 45 - 58 A. Financing Plan . . . . . . . . . . . . . . 47 - 49 B. Financial Prospects . . . . . . . . . . . 50 - 53 C. Protective Arrangements . . . . . . . . . . 54 - 56 D. Conclusion . . . . . . . . . . . . . . . . 57 -2- LIST OF ANNEXvS 1. Principal Agreements Relating to the Project 2. Market and Price Prospects for Manganese Ore 3. Estimate of Profitability at Present Day Prices h. Assumptions for Profitability Estimate 5. Income Estimates 6. Cash Flow Fore3asts 7. Balance Sheet Forecasts 8, Assumptions for Financial Forecasts 9. Cash Generation in Unfavorable Year 103 Transportation System 11. The Chemin de Fer Congo-Ocean Map 1 - Congo Republic and Gabon Republic Map 2 - Transportation Routes Map 3 - Ore Deposits APPRAISAL OF THE COMILOG MANGANESE HINING PROJECT (REPUBLIC OF GABON) SUMMARY AND CONCLUSIONS i. The project consists of the exploitation of manganese ore de- posits near hoanda, Gabon Republic, at the rate of 500,000 tons per year and the transport of this ore to Pointe Noire, Congo Republic, for ship- ment to market. It includes the construction of a 73 km. cableway and a 290 km. railroad. ii. All preliminary studies and designs have been completed and the construction of the railroad is expected to start within the next few months. It is estimated that it will take about three years to finish all project construction; the first ore is scheduled for shipment about mid 1962. iii. The cost of the project is estimated at F.Fr. 4h.0 billion ($89.1 million equivalent). Disregarding preliminary expenses for studies and engineering designs which have been met by the Comilog shareholders and capitalized interest on shareholders' loans during the construction period, the company's financial requirements for the construction period are estimat'ed at F.Fr. 38.9 billion ($78.7 million equivalent) including initial working capital and interest on external loans. Aside from the proposed IBRD loan and a small loan from the Caisse Centrale, the balance would be p-rov.ded by the shareholders as share capital or shareholders' loans. iv. The project is well conceived and well planned. Ore reserves are estimated Pt more than 100 million tons, sufficient for 200 years at the planned J-itial rate of production. The cost estimates are conserva- tive and contain adequate provision for contingencies. The financing plan is sound. On the basis of a study by the Bank, the company should be able to dispose of its output at satisfactory prices. v. Conservative financial projections indicate that the company should be able to earn a reasonable return. The debt/equity ratio should not rise above 47:53 at completion of construction and should fall rapidly during the early operating years. External long-term debt service should be covered by an adequate margin (1.8 times) from the start of operations. vi. The project is a suitable basis for a Bank loan of $35 million equivalent with a term of 15 years, including a four-year grace period. I. INTRODUCTION 1. In January 1959 Comilog (Compagnie Miniere de 1'Ogooue) requested the Bank to finance its project for the exploitation of extensive high-grade manganese deposits near Franceville, Gabon Republic, and the transport of the ore to the port of Pointe Noire. At the same time the French Government indicated its willingness to guarantee such a loan. 2. This appraisal of the project is based on information submitted by the company, and on investigations carried out by Bank staff in Paris and in the field during January and February 1959. II. THE BORROWER 3. The borrower would be the Compagnie Miniere de ltOgooue (Comilog), a corporation organized and existing under the laws of the Gabon Republic for the study and exploitation of the manganese deposits near Franceville. Pertinent agreements and concessions concerning the establishment and opera- tion of the company are given in Annex 1. A. The C2mpn 4. The capital stock of the corporation (2.5 billion Fr. CFA equiva- lent to F.Fr. 5 billion) is distributed as follows: Bureau Minier de la France d'Outre-Mer 22% Compagnie des 11inerais de Fer Magnetique de iokta-el Hadid 14% Societe Auxiliaire du Manganese de Franceville 15% U.S. Steel Corporation 2.94% Navios Corporation 46.06% 5. The Bureau ,inier is an agency of the Republic of France whose ob- ject is the promotion of mining development in the French Community. The Bureau Minier carries out much exploration work on mineral deposits and when sufficient ore is indicated it invites private capital (both French and foreign) to participate in the financing and commercial exploitation. It is the Bureau Minier's policy to reduce its holdings as opportunity offers. 6. The Compagnie des Minerais de Fer Magnetique de Mokta-el Hadid (Mokta), a French corporation, has some direct iron ore mining operations in Africa but the major portion of its income comes from investments in a number of mining companies in Africa and Spain. The company usually acts as sales agents for the products of subsidiary companies. The company controls the output and sales of important quantities of manganese from Morocco. 7. The Societe Auxiliaire du Manganese de Franceville, a French cor- poration, was formed to own and manage shares in Comilog. Share capital is divided equally among Mokta, Compagnie Miniere de L'Oubangui-Oriental and the Banque de Paris et des Pays-Bas. 8. The Navios Corporation, a Liberian corporation, is a wholly-owned subsidiary of the U.S. Steel Corporation, engaged in transporting or con- tracting for transport of iron ore and other raw materials to North American and European ports. -2- B . ManaEempnt 9. The company's management should be fully capable of carrying out the construction and operation of the project. During the past years the company has carried out the exploration and planning work for the project in a highly efficient manner. The company also has a technical assistance agreement with the U.S. Steel Corporation for services as required. III. THE PROJECT A. General 10. The project consists of the exploitation of manganese deposits near Moanda, Gabon Republic, and the transport of ore to Pointe Noire, Congo Republic, for shipment to market. (See ivaps 1 and 2). The following transport facilities are to be constructed and operated by Comilog: a) a 73 km. ropeway from the mine to M'Binda; b) a transfer station at M'Binda to load the ore from the cableway into railroad cars; c) a railroad of about 290 km. from M'Binda to a junction point 202 km. from Pointe Noire on the route of the existing Chemin de Fer Congo- Ocean (C.F.C.O.); d) storage and loading facilities in the Pointe Noire port. Additional information on the transport system is given in Annex l0and Annex 11. B. Proj(ct Detailg 1. The Mine a) Ore Denosits 11. The Comilog ore deposits are near Moanda, about 50 km. northwest of Franceville, Gabon Republic (see MJap 3). The ore consists of manganese- bearing boulders, fragments and grains in a sandy clay matrix covering four plateaus (Bangombe, Okouma, Bafoula and Massengo). Some ore also is indi- cated on the Yeye plateau. Comilog holds mining permits for all these de- posits and exposures. 12. The deposits are generally flat. The overburden is a layer of sandy clay only three to six meters thick and an intermediate layer of one meter containing some manganese. The mineralized layer is from four to six meters thick and is uniform over extensive areas. These conditions are particularly favorable. -3- b) Ore Reserves 13. Prospecting on the Bangombe and Okouma plateaus has been carried out by means of pits and large diameter drill holes following a regular grid pattern. A part of the Bangombe plateau has been selected for first exploi- tation and work is under way to pit and drill this section on a 125 meter grid. 14. The Bank's consulting geologist has reviewed the data submitted by Comilog and confirms that the exploration work has been carried out pro- perly and that the Bangombe and Okouma deposits should contain probable re- serves of more than 100 million tons of shippable ore. The estimates of probable reserves do not include important quantities of chemical grade ore (several thousands of tons) located along several water courses on the Bangombe plateau. Exploration of these isolated deposits is being carried on now. Tests are being conducted to determine whether this high-grade ore (up to 58 % manganese) would be suitable for dry cell batteries. As such the ore would command a high premium price. 15. The company has selected for exploitation during the early years a zone of about one square kilometer which is expected to yield nearly 8.8 million tons of ore with an average grade of 49.7% manganese (dry basis). c) Mining Operations 16. The deposits are especially suitable for open pit operation. At the production level planned for initial operations (500,000 tons of con- centrates per year) the mining would require the movement of about 300,000 cubic meters of overburden and 400,000 cubic meters of crude ore. Mining is thus a relatively simple operation and both the stripping and mining could be accomplished by three medium-sized drag lines. The overburden would be discharged directly into the mined-out area while the ore would be loaded into trucks for transport to the washing plant. The trucking dis- tance would not be more than one kilometer during the early years of opera- tion. d) Ore Processina 17. The crude ore, after being hauled to the washing plant, would pass through a crusher to reduce the large blocks of ore to less than five inches. It would then be washed and screened. At the present time, it is planned to discard all material of less than one-quarter inch in size. After washing, the concentrates would be loaded on the cableway for transport to the rail head. Studies are being made of the possibility of recovering fines by means of heavy media separation. -4- 2. The Cablewnv 18. A cableway was chosen for the section nearest the mine because of the heavy construction cost of building a railroad through the hilly and heavily forested terrain. The cableway, about 73 km. long, would have a guaranteed capacity of 830,000 tons per year. It would be made up of 10 sections of about seven km. each; five diesel generating plants, located along the route, would provide the necessary motive power. Provision would be made for ore stockpiles at two intermediate stations to maintain an even flow of ore to the railroad. 19. The Comilog cableway design has been patterned after a line 18 km. long which has operated for more than 30 years near Maxeville, France. Operation and maintenance of long cableways call for highly skilled and ex- perienced staff. Comilog may have difficulty in recruiting sufficient ex- perienced personnel and is taking steps to have operators trained on the existing installations in France. 20. Although the company believes the cableway the best solution, al- ternative methods, such as trucks and special tractor trains are still being investigated. Alternate solutions probably would not change investment or operating cost estimates appreciably but might enhance security of operation. 21. Should sales of ore rise above 830,000 tons annually, the capacity of the cableway would have to be increased or supplemented. It might be feasible at that time to extend the railroad to the mine. 3. The Railroad 22. Tho cableway would terminate at M'Binda where the ore would be transferred to the railroad cars. A stockpile of ore would be held at I'Binda in order to maintain train schedules if operating difficulties should stop the cableway for any length of time. 23. Marshalling yards and running repair shops would be located at M'Binda. No particular difficulties in the construction of the railroad are expected. The track would be 1.067 meter (3 feet 6 inches) gauge de- signed for axle loadings of 16 tons. A switching and inspection yard would be located at the junction with the C.F.C.O. line at kilometer 202. Each train would contain about 2,500 tons of ore. Thus one train daily would transport more than 800,000 tons annually. 24. The Niari and Louesse Rivers are the major crossings on the Comilog line. Should the Kouilou dam be built on the lower Niari, the two major bridges would have to be raised and some 12 km. of Comilog track would have to be replaced with 15 km. of relocated and raised track. The railroad con- vention, however, provides that in such an event, the raising of the track would be carried out as part of the Kouilou project without interruptions to Comilog traffic. If Kouilou is completed before March 1967, the maximum expense to Comilog would be limited to about $600,000 equivalent plus esca- lation for increases in labor costs and materials. Thereafter Comilog would have no further liability. 25. Comilog trains would operate over the existing C.F.C.O. track from about kilometer 202 to the port at Pointe Poire. Comilog, by the terms of the railroad convention must provide for service for passengers and gen- eral freight over its own line but at no cost to Comilog. It is expected that this service will be provided by the C.F.C.O. under the reciprocal trackage rights provision of the agreements between the two organizations. 26. Comilog expects to contract its overhaul and heavy maintenance work on rolling stock to the C.F.C.O. workshops at Pointe Noire. These workshops are well equipped and the personnel are experienced and do good work on the C.F.C.O. equipment. The C.F.C.O. has already developed plans to take care of the increased work from Comilog. 4. The Port 27. Comilog has leased in the existing port one pier and space for railroad tracks and ore storage. Facilities to be installed include a car dumper, stocking and destocking conveyor systems and a ship loader with a capacity of about 1,200 tons per hour. Initially a stockpile of up to 50,000 tons of ore will be carried at the port. As operations expand this may be increased to 100,000-150,000 tons. 5. General Services 28. The project would provide for a major township at the mine with necessary workshops, power generation facilities and other services. Water is available in quantity from one of the nearby rivers for both the town and washing plant. For economy, the washing olant water would be run to settling basins and recycled. Living ouarters and necessary repair shops would be located along the route of the cableway and at MWBinda. 6. Present Status 29. All the rm,ajor planning and engineering studies have been completed. Bids have been called for the railroad civil works and a contract was signed at the end of April 1959. Details of the cableway are being worked out with a group of manufacturers. Washing tests have been carried out on the ore and washing plant designs have been determined. Only general plans have been developed for the port installations but they can be completed well within the schedule. 7. Construction Schedule 30. The company estimates that the construction of the project will re- quire three years. First shipments of ore are planned for April 1962. It should be possible to meet this schedule. The mine and cableway would start operations six months before the completion of the railroad in order to build ore stockpiles at the intermediate stations and at M'Binda. -6- 8. Procarement 31. Procurement of goods and services has been and will continue to be on an international basis to the fullest practicable extent. Bidders for the railway civil works were prequalified and encouraged to form inter- national consortiums because of the size of the project and short construc- tion schedule. The Bank is satisfied with the procedures followed and the terms of the contract. 32. Locomotives, cars, rails, sleepers, loading and unloading facilities, mining equipment, etc., will be purchased by international bids although for some specialized equipment, invitations to bid may necessarily be limited to manufacturers with specialized experience. For example, Comilog is negotia- ting a turnkey contract for the cableway with an international group of four experienced cableway manufacturers. 9. Labor Reauirements 33. About 950 people (both African and European) will be required in the operation of the mine and transport facilities. There should be no dif- ficulty in finding sufficient personnel for operations from among the con- struction workers. Mining personnel will not reauire much expansion above the present level. The company is already training railroad operating per- sonnel in the C.F.C.O. school. 34. During the construction period, peak labor requirements are esti- mated at 3,000-4,000. It is not expected that the problem of securing labor on this scale will cause any delay in the execution of the project. It should be possible to recruit unskilled labor for railroad construction from along the route but it is expected that the contractors will have to bring in some skilled labor from surrounding regions. 10. Cost Estimates 35. The cost of the project is estimated at F.Fr. 44.0 billion ($89.1 million equivalent) as shown below: Million F.Fr. Mine and washing plant 4,020 Cableway 5,420 Transfer Station 830 Railroad 18,190 Port Installations 1,200 General Services and Townships 2,730 Engineering 1,950 Contingencies 5,130 Interest* 4,130 Initial Working Capital 400 Total 441-0 * Including interest on shareholders' loans amounting to F.Fr. 2.18 billion which would be capitalized and would not be a cash expenditure. - 7 - 36. The estimate is based on prices current in September 1958 adjus- ted in February 1959 to reflect the intervening devaluation of the franc. The contingency item should be adequate to cover both physical contingen- cies and increases in material and equipment costs during the three-year construction period. It should be possible to complete the project within this estimate as the contract has been let for the civil works portion of the railroad and the company has firm offers for the cableway, two of the major items in the project. Expenditures to December 31, 1958 amounted to F.Fr. 2.93 billion. 11. Production Cost Estimates 37. Production costs are expected to be somewhat above normal during the initial operating period and allowance has been made for this in the forecasts. Direct production costs (excluding interest and depreciation) should reach a normal level in the fourth year of operations. At that time they are estimated to amount to about F.Fr. 2.39 billion annually for an output of 500,000 tons, or about F.Fr. 4,780 ($9.70 equivalent) per ton. Under the terms of the Financial Agreement the company would be allowed to charge as depreciation about F.Fr. 6,700 ($13.50 equivalent) per ton. 38. Production costs have been conservatively estimated. Estimates are based on prices current in September 1958 adjusted in February 1959 to reflect the December devaluation of the franc. Prices for supplies and European labor have been increased 10% to 15% to allow for price increases in the intervening period before operations start in 1962. African labor costs are expected to rise more rapidly than other costs because of the im- pact of such a large project. Allowance is made for these costs to rise about 43 above present day prices. IV. IARKETING AD ILARITS A. Marketing Arranaements 39. Under the terms of the Protocol of April 21, 1953, the U.S. Steel Corporation has the exclusive option to acquire that percentage of total production corresnonding to the U.S. Steel participation in the capital of Comilog. At present this would amount to 49% or 245,000 tons of the initial planned production. 40. An exclusive sales agency has been granted to Mokta for the re- maining 51% of the output (255,000 tons) for sales in France, the French Community, North Africa and western Europe. This sales agreement runs for five years from the start of production and is renewable year by year by mutual agreement of the shareholders. A reasonable commission world be allowed viokta for sales to other than U.S. Steel. U.S. Steel has the pre- ferential option to acquire from Mokta that portion of the ore not sold by Mokta. 41. At the end of each year, prices for the next calendar year would be fixed based on current market prices for manganese ore for long-term contracts. B. The Market 42. About 95% of all manganese consumption occurs in the production of iron and steel and probably as much as 90% is used in the refining of steels. The principal use of manganese is as a deoxidizer and desulphuri- zer in the steelmaking process. A second important use is in the production of high manganese alloy steels which have high impact and wear resistance. A large percentage of the manganese added to steel is lost in the refining process and new manganese is required for each ton of steel produced. The future demand for manganese is thus closely linked to the prospective out- put of steel. 43. The marketing of Comilog ore is not expected to be a problem since 49% of the output or initially 245,000 tons is reserved for U.S. Steel, and the balance should be able to find a market in France or western Europe without difficulty. The total manganese requirements of U.S. Steel alone in 1962 are estimated at about 800,000 tons. However, it is unlikely that the company would get its full reauirements from Comilog as it has other properties of its own and also wishes to avoid undue dependence on any one source of ore, and consequently to maintain continuing relations with other suppliers. Recuirements in western Europe are expected to increase from 1.2 million tons at present to about 1.5 million tons in 1962. While part or all of this increase might be supplied from other sources Comilog is in a favorable position to capture a portion of this market from the outset of its operations by virtue of its high-grade ore. After 1962 increasing re- quirements should make it possible for Comilog to sell its planned minimum production of 500,000 tons without trouble. 44. However, since Comilog ore is to be sold at "market price" the production potential and operating costs of other suppliers will have a bearing on the profitability of the company. The long range expectancy is that the average price s unlikely to rise above the equivalent of $0.65- 0.67 per long ton unit , expressed in constant 1947-1949 prices, which would correspond to a price of $0.80 per unit in today's terms. A more detailed analysis of the market and price prospects is included as Annex 2. V. FINANCING PLAN AND FINANCIAL FROSPECTS 45. An estimate of the profitability of the company on the basis of present day prices is given in Annex 3. The assumptions on which this esti- mate is based are listed in Annex 4. Financial projections based on prices expected to prevail in 1962 are attached showing the expected earnings of the company (Annex 5), its cash flow (,qnnex 6) and its financial situation (Annex 7) on completion of the construction period, including initial opera- tions, and during the first seven full operating years. The assumptions on which the forecasts are based are listed in Annex 8. 1/ The price of manganese ore is quoted as cents per unit of manganese contained in one long ton of ore. One unit is equal to 1% or 22.4 pounds of manganese. -9- 46. The projections indicate that the financing plan is sound. Com- pany earnings would be modest because the agreement allows for rapid depre- ciation of assets but by the same token the cash generation should be more than adequate to service the long-term debt and provide for an early return of capital. The prospective financial structure of the company is satis- factory. A. Financing Plan 47. Certain expenditures have already been made on the project and interest during construction on shareholders' loans would not be a cash ex- penditure. Estimated cash requirements for the completion of the project are F.Fr. 38.9 billion ($78.7 million equivalent) as follows (billion F.Fr.): Estimated cost of project 44.0 Expenditures to December 31, 1958 met from share capital 2.9 Estimated interest on shareholders' loans during construction period 251 Cash required for completion 2.2 48. The cash requirements of the project are expected to be financed from the following sources: F.Fr. $ million billion equivalent A,'itional share capital 2.07 4.2 S&rareholders' loans* 15.60 31.6 Caisse Centrale loan 3.50 7.1 IBED loan 17.29 35.0 Cash generated during initial operations 2.00 Total Z(0.46 81.2 * Excluding capitalized interest. 49. The company may charge interest paid on shareholders' loans as an expense for income tax purposes. From the Bank's point of view, however, they should be treated as part of theequity. The Caisse Centrale loan has been negotiated; terms are given in Annex 8. The shareholders have agreed to finance any shortfall which may occur from an overrun on construction costs, either by additional share capital or by loans. - 10 - B. Financial Prospects 50. The profitability estimate indicates that, at today's costs and with depreciation based on the economic life of the fixed assets, the com- pany would earn a satisfactory return of 8-9% on equity (share capital plus shareholders' loans) with the price of ore at $0.80 per long ton unit. Current quotations are about 15% above this price. 51. The financing plan and financial forecasts, however, are based on the actual financial agreements between the company and the authorities and on prices expected to prevail during the construction period and at the start of operations in 1962, on the realistic assumption that costs would continue to advance at the same average rate as in the past few years. By the same token a price of $0.92 per long ton unit has been taken as a rea- sonable estimate of the price of manganese ore at the start of operation. On this basis the financial forecasts indicate that, by taking depreciation at the full allowable rate, the company would earn only a modest return on equity (share capital plus shareholders' loans) in the early years of opera- tion. Interest on the shareholders' loans at the assumed rate of 6.5% would not be earned in full until the eighth year of full operations. However, the liquid resources of the company would increase rapidly by about F.Fr. 2.0 billion per year. This accumulation of funds could be used to accelerate repayment of the company's external long-term debt. 52. The long-term debt:equity ratio would decrease from 47:53 at the end of the construction period to 24:76 by the end of the seventh year of full operations. The coverage on total external long-term debt would not fall below 1.8 times at any time. Total external long-term debt would still be covered even if the price of manganese ore were to fall from $0.92 per unit assumed in the forecasts to $0.80 per unit and sales to 400,000 tons (Annex 9). 53. These forecasts are conservative in that they take no account of: (1) possible sales of chemical or battery grade ore which sells at prices of two to two and one-half times those for ordinary manganese ore; (2) rea- sonable prospects that the grade of ore shipped may be above the 49.7% (dry basis) manganese content assumed; (3) operating costs for the heavy media separation plant are included in the forecasts but no benefit is assumed for increased recovery or improved grade; and (4) sales rising above the 500,000 ton level. In this connection it is pertinent to note that the company, and the U.S. Steel Corporation, expect the long-term price of manganese to be 15/20% higher than has been assumed in this appraisal. C. Protective Arrangements 54. Because of the risk inherent in mining ventures, the relatively large amount of debt in relation to the equity, and the absence of long-term contracts at fixed prices, the contractual arrangements for a Bank loan con- tain provisions to the following effect: - 11 - a) The company would not make any payment to shareholders which would reduce net working capital below a level satisfactory to the Bank; b) If net current assets at any time fell below a level satis- factory to the Bank, the shareholders would make good the deficiency by way of additional loans. Such additional loans might be repaid if their repayment world not reduce net working capital below a level satisfactory to the Bank; c) The company would not, without the Bank's consent, repay any part of the shareholders' loans if the ratio of ex- ternal debt to equity would be above 25:75; d) Interest on shareholders' loans would be paid only to the extent that it was earned; e) The payment of dividends would also be limited, both in relation to a specified level. Any dividend payments above the specified level would be matched by repayment of external debt; f) In calculating profits, the full depreciation permitted under the tax convention would be charged; g) The company would not, without the Bank's consent, incur any further external long-term debt; h) The company would not, without the Bank's consent, invest money for purposes other than the mining and transportation of manganese ore from the deposits near Moanda. 55. These arrangements insure that the company would be in a position to meet all its financial obligations without jeopardizing its liquidity. It is probable, in fact, that the company would be able to accelerate the repayment of its external debt. 56. The term of a Bank loan has been assumed to be 15 years (including four years' grace period). The projections show that on the assumptions used, the company might be able to repay the amount of the proposed Bank loan in a shorter time. However, it is not recommended that a loan be made for a shorter term, in view of the risks inherent in a mining venture. D. Conclusion 57. The project would be a suitable basis for a Bank loan of $35 mil- lion ecuivalent for a term of 15 years (including a four years' grace period). ANNEX 1 Page 1 C 0 M I L 0 G PRINCIPAL AGPEBEMENTS RELATING TO DE PROJECT 1. Dnareholders Protocol - dated April 21, 1953 - providing the general terms on which Comilog would be established including the distributio7-i of capital shares, the basis for distributing production and calculating selling prices. 2. Comilog Convention - dated April 22, 1953 - defining in general terms Comilog's right to explore ore deposits and subsequently exploit them in accordance with necessary concessions (which may be granted in the future). The Convention establishes that the ore sold to French or Western European purchasers will be sold "at not less than world market price". 3. Technical Assistance Contract - dated May 20, 1954 - defining the terms on which technical assistance will be given by U.S. Steel to Comilog. 4. Shareholders' Loans Protocol - dated July 30, 1957 - establish- ing the terms and amounts of loans from the shareholders for the construction of the project. This will be amended in the near future to conform with Bank requirements. 5. Agreement between the Caisse Centrale de la France d'Outre-Mer and Comilog - dated February 25, 1958 - for a loan of F.Fr. 3.5 billion. 6. Arrete No. 381,M of January 26, 1957 and Arrete No. 516-M of February 5, 1957 - instituting Mining Concession No. 13 in Comilog's favor and changing the general investigation permit into an exploitation permit. 7. Railroad Agreement - dated March 27, 1957 - regarding the establishment and operation of Comilog's mining railroad. 8. Operating Agreement - dated September 10, 1957 - setting forth the terms for the operation of Comilog trains over the C.F.C.D. tracks and vice versa. 9. Port Lease Contract - dated August 7, 1957. Fort Convention - dated November 5, 1957 - authorizing Comilog to make port installations at Pointe Noire. 10. Financial Agreement - dated July 4, 1957 - relating to the financial obligations of a mining concessionaire and fixing allowable rates of depreciation on various items. ANNEX 1 Page 2 11. Deliberation No. 83/56 - dated November 9, 1956 - of the High Council of the AEF fixing the export tax applicable to manganese ore. 12. Establishment Agreement - dated March 15, 1959 - regarding the establishment and the functioning of Comilog in the Republics of Gabon and Congo and consolidating all previous agreements. AlNEX 2 Page 1 C 0 M I L 0 G 1ARKET AND PRICE FROSPECTS FOR i%ANGANESE ORE I. SlXgJY 1. About 95% of all nanganese consumption occurs in the production of steel. !anganese is essential both in the production of pig iron and in steel making. In steel making manganese is used mainly in the form of ferro-manganese, an iron-manganese alloy produced from manganese ore. In most western countries it is not necessary to add manganese ores or alloys in the blast furnace, since the iron ores charged together with recirculated open hearth slags contain all the manganese needed. In practice, therefore, the demand for manganese ore originates mainly from ferro-manganese addi- tions to the steel furnaces. In the USSR, on the other hand, about two thirds of the consumption of manganese ore is for additions in the blast furnace; the main function of manganese there is presumably to prevent the high sulphur content of Russian metallurgical coke from being carried over into the pig iron. 2. Total world production of manganese ore averaged about 15 kg. per ton crude steel in 1926-1935 and 1945-1949, but was about 19 kg. per ton crude steel in 1936-1940 and in 1950-1957. The main reasons for these dif- ferences would appear to be considerable stockpiling in the latter periods and, in 1950-1957, the growing importance of the USSR steel industry which consumes about four times the manganese per ton of crude steel as do the western producers. 3. It is estimated that out of a total world consumption of about 10 million tons of manganese ore in 1957, the USSR and eastern Europe consumed roughly one half (as contrasted with less than a 25%o share in the world steel output), and in addition exported about 0.4 million tons to the rest of the world. The United States and western Europe consumed about 2.0 mil- lion tons each, all but a small portion of which was imported. The major suppliers were Africa (about 1.7 million tons) and India-Goa (about 1.4 mil- lion tons). The United States in addition imported about 1.0 million tons of ore from latin America (including purchases for strategic stockpiling), while western Europe purchased about 0.4 million tons from the USSR. 4. Reflecting a very rapid upsurge in steel production combined with heavy strategic stockpiling, prices for manganese ore which only exception- ally rose above 65 cents per long ton unit before the war (in terms of the 1947-1949 dollar) have been unusually high during most of the 1950s, reach- ing a new peak of 134 cents in 1957 (again in terms of the 1947-1949 dollar). Since then there has been a steady decline, and March 1959 prices (92-98 cents per long ton unit) were about 80 cents in terms of the 1947-1949 dollar. 1/ The price of manganese ore is quoted as cents ner unit of manganese contained in one long ton of ore. One unit is equal to l% or 22.4 pounds of manganese. ANNEX 2 Page 2 5. An analysis of prospective demand compared with production poten- tial indicates that there will be no shortage of manganese ore by 1962 in tne absence of strategic stockpiling. Consequently, there may be a downward pressure on ore prices at least until they reach the historical level of about 65-67 cents in terms of the 1947-1949 dollar. 6. An estimate of the probable costs of producing and shipping man- ganese ores from major producing regions indicates that a price of 65-67 cents per long ton unit (in terms of the 1947-1949 dollar) would be sufficient to bring forth the manganese required by the world's steel industries. Hence, prices are not likely to rise above this level over a period of years. This would correspond to a price of about 80 cents per long ton unit in terms of the current dollar. II. TREIDS IN COSUMvPTION. PRODUCTION AND TRADE 7. World production of manganese ore and crude steel are shown in Table I. The relationship between maanganese ore production and steel pro- duction has fluctuated from one year to another. In order to eliminate the effect of short-run fluctuations, five-year averages for the production of manganese-in-ore per ton of crude steel are shown below: 1926-1930 15.0 1931-1935 14.6 1936-1940 18.9 1945-1949 15.5 1950-1954 19.8 1955-1957 (3-year average) 18.0 8. World production of manganese ore during the period 1950-1957 was considerably higher than actual consumption due to stockpiling. This inven- tory buildup appears to have been the major reason for the high production of manganese ore in relation to world steel output during this period. Stock- piling by the United States, the United Kingdom and the ECSC area in 1955- 1957 may have totalled as much as 3.5 million tons of manganese ore, i.e. about 1.5 million tons of manganese-in-ore. If this stockpiling by major western industrial nations is deducted from the world manganese ore output, it would reduce the manganese-in-ore figure from about 18 to about 16 kg. per ton of steel. Stockpiling during the period 1950-1954 was on an even greater scale both in the United States and in the United Kingdom, and a similar adjustment for this period wo_ld no doubt also reduce the probable consumption per ton of crude steel to about 16 kg. as compared with the apparent consumption of 19.8 kg. ANNEX 2 Page 3 9. A rapid exDansion in world output of manganese ore took place to meet increased requirements from the growth in world steel production (from 189 million tons in 1950 to 286 million tons in 1957) and stockpiling for strategic reasons. The following data illustrate where this expansion took place. Further details are given in Table II. World ProductAon of Mnese Ore (Million metric tons) 1/ Increase 19V2 1950 1957 1950-57 North & Central America 174.7 237.0 669.8 432.8 South America 276.2 231.5 900.9 669.4 Western Europe 51.8 (70.0)2/ 120.2 50.2 Eastern Europe, excl. USSR 78.8 (190.0)2/ 421.3 231.3 USSR 2,752.0 (3,500.0)Z 4,970.0 1,470.0 Africa 1,460.0 1,832.2 2,385.5 553.3 Asia 1,297.5 1,145.5 2,240.0 1,094.5 Oceania 1.2 21.2 103.7 _82.5 Total Production 6,092.2 7,227.4 11 811.4 4,584.0 Of which - India 1,068.5 899.0 1,596.5 697.5 South Africa 631.2 792.6 716.3 -86.3 Ghana 535.5 724.3 648.9 -75.4 Morocco 76.5 287.7 492.5 204.8 Belgian Congo 27.5 17.0 367.8 350.8 Brazil 262.4 196.0 799.7 603.7 1/ Pre war Peak year. 2/ Estimated. 10. In 1950 the total output and the pattern of production of manganese ore was similar to the situation before the war, apart from a sizeable expan- sion in the USSR output designed to meet the internal needs of the Soviet bloc. Indian production lagged somewhat but this was more than compensated by fairly substantial increases in South Africa, Ghana and, in particular, Morocco. 11. Since 1950, the total output outside USSR and eastern Europe has grown from about 3.5 million tons to about 6.4 million tons, while at the same time the output in the USSR and eastern Europe has apparently increased by about 1.7 million tons. Of the total free world increase of nearly 3.0 million tons, Asia and the Western Hemisphere each accounted for well above one third, with Brazil (now appearing as a major world producer) and India contributing over 20% each. African expansion was mainly in the Belgian Congo and Morocco (both relatively minor producers before the war), while production actually declined in South Africa and in Ghana. ANNEX 2 Page 4 12. Total imports of about two million tons of manganese ore in 1956 by major European consumers (Table III) were only slightly above those in 1937, while United States imports rose fror less than one million tons to over two million tons. There were only slight changes in the European sources of supply (the new producers in Belgian Congo and Morocco replacing some of the South African ore). Since imports from the USSR were discon- tinued, United States requirements from other sources rose by over 1.5 mil- lion tons, and were covered by increased purchases in India and Goa (0.6 million tons), South America (0.4 million tons) and Africa (0.5 million tons). The USSR in 1956 supplied only about 0.35 million tons of manganese ore to western Europe as compared with 0.7 million tons to the United States and western Europe before the war. III. PRICE 3OVEIENTS 13. Graph I shows the price movement for Indian manganese ore from 1920 to March 1959. The yearly price used is an average of the price for the first week in January and in June recorded in the "E & MJ Metal and Mineral arkets" for- Indian ore CIF New York excluding duty on contracts for delivery periods up to one year. In order to permit a valid price com- parison over the period, the average annual prices were deflated by the United States General Index of 7iJholesale Prices for expression in terms of the 1947-1949 dollar (1947-1949 = 100). According to data submitted by the U.S. Steel Corporation, long-term contract prices were considerably higher than the above market quotation during the 1926-1939 period, but in the sub- sequent period of generally rising prices contract prices have typically lagged behind the market quotations. 14. i the period 1920-1939 the published real price for manganese ore did not riec above a level of 65 cents per long ton unit except in 1920 and 1938. The average for the 1936-1939 period was 63 cents. (The average long- term contract price, according to U.S. Steel data, was about 72 cents.) This was a period of heavily increasing demand for manganese, and world pro- duction rose from about 1.6 million tons in 1920 to about 3.4 million tons in 1929 and again to a new peak of about 6 million tons in 1937. In 1947- 1949, when world production of manganese ore had again reached the same level as before World War II, the published average annual real prices varied between 60 and 71 cents. From 1950 to 1957 real prices rose almost continu- ously, reaching a peak in 1957 at an average of $1.34 per unit. The major factor in this increase was an unprecedented demand for manganese ore caused by an 80% increase in world steel production and the intensification of stockpiling by the United States (estimated to have amounted to about 0.75 million tons per year during this period). The strain on the free world resources of manganese ore was augmented by the fact that the USSR exported only on a relatively modest scale, shipping some 300,000 tons of ore per year to the western world in 1955-1957. Since 1957, there has been a fairly sharp fall in prices. The present nominal quotation of 92-98 cents corres- ponds to about 80 cents in terms of the 1947-1949 dollar, with buyers appa- rently reluctant to enter into long-term commitments. ANNEX 2 Page 5 15. The most plausible interpretation of this erratic price history is that a real price of about 65-67 cents is a normal price for manganese which has encouraged expansion in the past, and that the high pre war prices are abnormal, resulting from heavy stockpiling cumulated upon the sudden increase in demand for steel production. This conclusion, however, is con- ditioned upon the assumptions: a) that the pre war price was not artificially depressed by cutthroat competition and the Russian export drive. This saems unlikely in view of the substantial expansion which took place in countries outside the USSR both in the 1920s and again in the late 1930s; b) that real mining costs have not increased over pre war costs. There is little evidence that they have. Real prices for iron ore are now at about the same level or in some cases lower than before the war, in spite of the rapid increase in steel pro- duction and the necessity of mining lower grade ores and distantly located ores. The case of copper may also be cited. Several studies indicate that the present normal price for copper would be in the neighborhood of 30 cents, corresponding to about 25 cents in terms of the 1947-1949 dollar. This is roughly the same price as in 1925-1929 although higher than the real price in 1936-1939 of about 20 cents, which reflected the coming into operation on a large scale of low-cost pro- ducers in Rhodesia and the Belgian Congo. The stability of the copper price is particularly remarkable since reserves of high-grade copper ore would appear to be much more limited ti-a. reserves of high-grade manganese ore and it has become necessary in many areas to mine ores of a rapidly declining copper content; c) that the real costs of ocean transport have not increased. (In the case of e.g. Indian and South African ore, the cost of ocean transport is often as high as the value of the ore FOB mine.) It is not believed that this is the case. ANNEX 2 Page 6 IV. FUTURE MARKET AND PRICE FROSPECTS A. Demand ProjectIon 16. Table IV shows the estimated demand for manganese ore in 1962 and 1967. Certain basic assumptions were made in order to make these estimates. These were: a) that the free world steel production would increase about 4.5% per year over the 1957 base. This figure is consis- tent with various published plans and estimates; b) that there would be no major change in the ore consumption per ton of steel; c) that the relative proportions of the total manganese supply from manganese ore and from other low-grade sources for manganese would remain unchanged. 17. Based on these assumptions, free world manganese ore requirements are expected to rise from 4.9 million tons in 1957 to 6.3 million tons in 1962 and to 7.6 million tons in 1967. These projections are conservative in that no allowance has been made for any increase in commercial inventories in response to the increased steel output. Based on a minimum of six months' requirements, increased inventories might amount to about 0.2 million tons annually. B. Supoly Prospects 18. A summary of estimated world reserves compared to 1957 production is shown below: Estimated 1957 Ratio Reserves OutDut Reserves/Output - (Million Tons) - Latin America 72.0 1.24 58 Africa 280.0 2.39 117 Asia and Oceania 110.0 2.19 50 Western Europe, U.S.A., and Canada .O _Q50 1 Worl. ex _IP~SR_ffn___astern USSR 550.0 4.97 110 Eastern Europe 0.2 10 USSR and Eastern Eurove 554.0 5.39 103 World Total 1,019.0 11.71 87 1/ A substantial portion of the output comes from low-grade deposits in the United States which are not included in the reserves. ANNEX 2 Page 7 Estimated 1957 Ratio Reserves Output Reserves/Output - (illion Tons) - - Major Producers Brazil 63.0 0.80 79 Morocco 8.0 0.50 16 Ghana 7.5 0.65 11.5 Gabon 150.0 - - Belgian Congo 10.0 0.40 25 Urion of South Africa 60.0 0.70 86 India 112.0 1.75 64 19. Insufficient or scattered reserves will act as a severe brake upon expansion in western and eastern Europe, United States, Mexico and Cuba, and, among the major exporters, Miorocco and Ghana. These areas produced about 2.35 million tons of ore in 1957. It has been assumed that the production in all these areas will be the same in 1962 as in 1957. The primary offset against tle stagnating production in these areas will be new mines in Gabon Republic, British Guiana, French West Africa and possibly the Kuruman field in South Africa which together may produce about 1.1 million tons by 1962. As far as other major producers are concerned, past experience suggests that together they would at least share in the assumed 4.5% annual expansion in the world market. With respect to sundry producers in Asia, Africa, and Latin America, it may be noted that they increased their output from an average of about 0.33 million tons in 1948-1952 to 0.64 million tons in 1953 and 0.87 million tons in 1957. It has been assumed that they also could expand their output by 4.5% per year. The further assumption has been made that exports from the USSR to western Europe will continue at the present level of abcat 0.4 million tons annually. On this basis, the following po- tential supplies of manganese ore are arrived at for the world outside the USSR, eastern Europe and Mainland China in 1962. Corresponding 1957 produc- ton totals are shown within brackets (million tons): United SUates, Cuba, Mexico 0.67 (0.67) Brazil 1.00 (0.80) British Guiana 0.36 (- ) Other Latin America 0.12 (0-10) Total :iestern Hemisphere 2.15 (1.57) Western Europe 0.17 (0.17) New mines, Gabon, French 'rest Africa, South Africa 0.75 ( - ) Morocco and Ghana 1.14 (1.14) Other producers, Asia, Africa, Oceania 4L2 (3L) Total Potential Output 8.43 (6.32) Imports from the USSR Q32 (0-37) Total Potential Supply 8.80 (6.'9) ANNEX 2 Page 8 20. The potential supply of 8.80 million tons compares with an esti- mated demand, apart from stockpiling, of 6.30 million tons, only about 70% of the potential supply. A difference of this magnitude will necessarily cause some pressure upon ore prices. Even on the assumption that India would be unable to increase manganese exports because of transportation difficulties, and that production in Ghana and Morocco would fall by 250,000 tons because of gradual exhaustion of the mines, there would still remain a po tential supply surplus of nearly 2 million tons. This does not mean that an ectual surplus will develop. The pressure of prices may cause some tem- porary reduction in output and some marginal producers may be forced to close. In the longer run a balance of demand and supply will be achieved by the rising demand for steel and by the gradual exhaustion of reserves in Ghana and Morocco. C. Future Prices 21. Prices for manganese ore are unlikely for any length of time to fall below a level which does not cover costs and permit a reasonable pro- fit for the bulk of the mines. Data are not available to make a reliable comparison of mining costs for major producers. However, transportation costs from mine to market are generally a major portion of the consumerst total cost of the ore and the competitiveness of a mine may be determined largely by its nearness to the market as measured by transport costs. 22. Based upon a world market price CIF United States and western Europe of 80 cents per long ton unit (corresponding to today's value derived from 67 cents per unit in terms of the 1947-1949 dollar) and estimated or published transport costs from mine to market, it would appear that the FOB mine returii.l on this basis would be sufficient to bring out most of the potential output indicated for 1962. In view of the foregoing, there appears to be no reason for the price level of manganese ore to rise above the level of 65-67 cents in terms of the 1947-1949 dollar. ANNEX 2 age 9 TABLE I World Production of Manganese Ore (in termy of Mn content) and Crude Steel, 1926-1957.f (million metric tons) Year Mn-in-Ore Crude Steel Mn-in-Ore kg,per ton cruae steel 1926 1.48 93.5 15,8 1927 1.59 101.8 15.7 1928 1.50 110.0 13.6 1929 1.71 120,7 1)02 1930 1.54 95.o 16,2 1931 0.99 69.6 14,2 1932 o.54 50.7 1o,6 1933 0.78 68.1 11.4 1934 1.3 82.2 16 1935 1.8 99.4 18 1936 2.3 123.7 20 1937 2.7 135.3 20 1938 2.4 109.7 22 1939 2.3 135.1 17 1940 2.5 142.3 18 19L5 1.8 113.3 16 196 1.9 111.5 17 19L7 1.9 136.0 14 19b8 2.1 155.3 13.5 1989 2.8 159.7 17.5 1950 3.2 188.7 17 1951 4.0 209.8 19 1952 ).5 210.1 21.5 1953 4.9 232.5 21 1954 4.5 221.5 20 1955 4.7 266.2 17.5 1956 (4.9) 278,1 18 1957 (5.2) 286.3 18 17 Excluding mainland China Source: United Nations Statistical Yearbook and Monthly Bulletin of Statistics and, for 1926-29, League of Nations Statistical Yearbook. Figures for production of manganese ore 1926-29 have been converted by the IBRD staff to equivalent tons Mn, based mainly upon the manganese content of ores mined in 1930. ANNEXg ABLE I Page 10 Mineral Trade Notus, Vol. 47, No. 4 October 1958 ML. - The following table on world production of mngn~e oro was prepard in the Division of Foreign Activitis, Bureau of Nine, for publication in Minerala yearok, 1957: World ~rdution of = ~n9n9s or*. by countrieal. 1948-52 (avmre) and 1953-57. in ~hrt 1tnA (Coiled by Pe«rl J. Thopon) ~try-ly Percent 194&.52 1953 1954 1955 1956 1957 n_ (~1eng9) North America: Cuba ..................... 36-50+ 127,108 389,356 296,801 346,680 21257,996 2/148,276 xco ..................... 30+ 80,461 269.863 277,996 97,326 V171,000 1/220,000 Pm~.. - - - - - - 1/2,154 United Stat-e (ehipmente). 35. 122,414 157,536 206,128 287,255 344,735 366,334 Total.............. 329,983 816,755 780,925 731,261 773,731 736,764 South America: Argentina.................. 30-40 1,914 5,512 1,323 5,512 9,682 16,535 Brasil.. ........... 38-50 230,096 255,058 179,157 234,249 342,590 879,717 Chile...................... 40-50 39,585 60,207 58,422 /58,400 51,878 å/50,000 Peru....................... 788 1,323 4,960 6,008 8,047 11,850 Venezuela.................. 46-4 - - - - 10,318 32,939 Total.............. 272,383 322,100 243,862 304,169 422,505 991,041 Europe: Bulgaria3................... 30+ /14,330 23.149 36,376 69,005 77,933 V88,000 Greece ..................... 35+ 8,201 15,577 18,697 27,148 28,660 28,000 Hungry ........ 30+ 84,794 132,038 120,412 105,208 k/83,000 83,000 Italy.30 30,579 44,157 54,902 62,371 50,627 51,811 Portugal................... 35+ 4,468 13,918 10,627 4,388 3,508 5,812 Ruani .................... 35 /92,400 199,518 302,033 429,814 259,054 292,402 Spain. .. 3 23,250 36,044 39,511 48,375 36,100 40,543 U.S.S.R. ................ - 3,760,000 5,115,800 5,356,100 5,228,300 5,443,200 5,467,500 TugoslvIa................. 3(» 10,720 5,.81 4,960 4,850 16,000 /6,000 Total ........... 4,028742 5,585,382 5,943,61 5,979,459 5,988,082 g/6,063,100 Asia: Burma...................... 35+ 1,897 9,610 4,160 342 1,27 506 India...................... 1,077,278 2,130,511 1,582,639 1,773,566 1,824,483 1,756,163 Indon*I&.................. 35-49 2,204 36,729 22,309 38,810 90,568 59,257 Iran 2/.................... 36-46 4,582 6/4,400 8,799 5,484 6,614 2,205 Jpan...................... 32-0 152,954 214,286 180,155 222,350 314,175 308,429 Korea, Republic of......... 30-4 2,175 3,371 1,744 3,838 2,158 3,533 Philippina5................ 35-51 27,489 23,708 10,354 13,131 4,866 33,324 Portugues* India........... 32-5< 54,919 166,227 116,756 149,523 2/177,702 131,998 Thaland................... 52 - - - - 450 381 Turkey..................... 30-50 42,793 99,038 54,925 55,228 65,962 58,038 Total L_......... 1,381,000 2,737,500 2,048,000 2,350,000 2,576,000 2,464,000 Africa: Angola ..................... 38-48 28,571 72,603 34,865 34,853 29,647 23,517 Belgien Congo.............. 50 53,115 238,831 424,320 508,972 363,250 404,572 Egpt / ................... 57 1,509 3,578 6,991 7,994 21,195 W10,000 Chana (exporta) 2/......... 48 824,923 835,510 515,475 604,330 712,154 713,757 Xorocco: morthern son............ 50 1,204 1,181 856 1,262 953 732 Southern no............ 35-50 339,02 473,304 441,203 453,013 464,523 541,772 Rhodesia and yaualand, Federation of: Northern hoia0........ 1/2,905 7,984 17,562 19,717 44,171 41,294 Southern Rhoddeas........ - 355 - 18 1,330 816- 1,785 South-Weut Africa.......... - V12,515 40,654 34,066 41,800 57,262 89,661 Sudan. 6-44 - - - - 7,716 119,000 Union of South Africa 404 739,873 912,333 772,862 649,471 768,395 787,878 Total.............. 2,004,772 2,585,978 2,248,218 2,322,822 2,470,082 2,623,968 Oceania: Autralia.................. 10,404 36,897 31,587 53,039 66,510 86,402 Pi£ ....................... 4+ 683 2,448 10,773 19,83 21,636 M/27,653 lew Caledona.............. 45+ 9,854 6,163 - - - - Z e ..........,... 0 427 324 a8 179 175 41 Papa...................... - 50 47 - 17 - - Total.............. 21,418 45,879 42,628 73,058 86,321 114,096 World total (estimae)#. 8,03s,000 12,094,000 11,307,000 11,761,000 12,319,000 13, 000 In addition to Uounrits liuted Ghina and Uorth :orea have P ~edaeed --e-e are; data of outpt are not avaia, but estimates for them are inluded Ia the totala. Omsohoalokia and ~aden reort pwdation of men nee or, bet ~--- the mnu ~- on6 nt average less than 30 percent, the output is not in- ~*4ded In this table. S5~den averag ~r==11 15,000 tons of apMe~ ,y 15 percent mane~nese oontent. This table inorporat6s a ~mber of revision of data publiahed in pr~vi MNM ~neee ohapters. Data do not Add actly to totala shoe, boen« of roundin where etjetad figeres are inluded in the detail. Emports. Eatimatc. Grade etated. Souroe: The Industry of the U.S.S.3., Central Statigtical A~ ~ration, 1957 (Noeoow). Yoar endi March 2D of yar following that statd. In addition to hig-gade ore sh~n Am the table, Egypt proded the folloing toge of leg than 30 perOent nee *ont%t 1948-52 (averag), 152,160; 1953, 309,571: 1956, 188,703; 1955, 227,042; 1956, 200,075; and 1957, net availeble. ry msight. Average for 19ý1-52. Aveags for 1950-52. -29- ANTEX 2 Page 11 TABLS III Imports of Manganese Ore to United States and to Major Con- sumers in Western Europe, by Supplying Countries, 1937 and 1956 (million metric tens) United States Major European Consumers 1937 1956 1937 1956 Supplier Mexico and Cuba 0.12 0.35 - - Brazil 0.08 0.26 0,o7 - Morocco - 0.06 0.04 0.26 Ghana 0.26 0.34 0.11 0.31 Belgian Congo - 0,21 0.01 0,12 South Africa - 0.19 0.38 0.21 India, 0.07 0.61 0.73 o.68 Goa - 0.04 - 011 USSR 0.38 - 0.33 0.34 Other - 0.04 0.17 - Total 0.91 2.10 1.84 2.03 ANNEX PageZ GRkPH I ACTUAL PRIGES FUR INDIAN MANANESE ORE CIF NEW YORK EXCLUDING IiTY AND "REAL PR[CES" (IN TERIS OF THE 1947-1949 DYMR) 160 120 100 0* ~80 0 20 1920 25 30 35 ho Ja 50 55 6 65 ANNEX 2 TABLE IV Page 13 Estimated Consumption of Manganese Ore 1957 and Estimated World Demand 1962 and 1967, by Areasi/ (million metric tons) Ore Equivalent Ore Equivalent of Est. Manganese Steel Ouut of Manganese Consumption Area 1957 1962 1967 Consumption 1957 1962 1967 1g. per ton steel E.C.S.C. 59.8 76 92 20 1.20 1.52 1.84 U.K. 22.0 28 34 24 0.53 0.67 0.82 Other Western Europe2/ 9.0 12 15 27 0.24 0.32 0.40 Western Europe 90.8 116 141 22 1.97 2.51 3.06 United States 102.3 115 128 20 2.05 2.30 2.56 Canada 4.6 6 7.5 25 0.11 0.15 0.19 Latin America 3.5 5 6.5 30 0.11 0.15 0.12 Western HemisphEre 110.4 126 142.0 20.5 2.26 2.60 2.94 Japan 12.6 16 19 30 0.38 0.48 0.57 India 1.7 5 8 1002/ 0.17 0.50 0.80 Rest of Asia,Oceania,Africa 5.2 7 9 _0 0.17 0.21 0.27 Africa and Asia 19.5 28 36 37 0.72 1.19 1.64 U.S.S.R. 51.0 76 101 80 4.08 6.08 8.08 Eastern Europe 18.7 28 37 60 1.12 1.68 2.22 U.S.S.R. & 7astern Europe 69.7 104 138 75 5.20 7.76 10.30 World,excl. U.S.S.R. & Eastern Euro; s 220.7 270 319 22.5 L.4 6.30 7.64 World Total 290.4 374 457 35 10.1 '14.06 17.94 Excluding Mainland China. Including Yugoslavia. 3J According to Mineral Trade Notes, July 1958, the Indian domestic consumption in 1957 was 200-250,000 tons of manganese ore. Even allowing for some inventory build-up and exports of ferromanganese, this gives a consumption of 100 kg. of manganese ore per ton steel. The reasons for this high consumption (if the figures are correct) are not known. World production of manganese ore was 11.8 million metric tons. Stockpiling in major western industrial nations is estimated at 1.44 million tons, leaving a balance of 10.36 million tons. Allowing for some stockpiling in other areas, this figure agrees rather well with the above total of 10.14 million tons. ANNEX 3 C 0 MIL 0 G ESTlMATE OF PROFITABILITY AT PRESENT DAY PRICES (Million French Francs) Year Ended December 31 1962 1963 1964 1965 1966 1967 1968 1969 Production - tons 325,000 500,000 500,o000 500o0 500,000 500,000 50000 500,000 Sales - tons 275,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 Gross Sales fob Pointe Noire 3,25*9 6,956.2 6,956.2 6,956.2 6,956.2 6,956.2 6,956.2 6,956.2 Export Tax - 8% 306.1 556.5 556.5 556.5 556.5 556.5 556.5 556.5 Net Sales 3,519. 6,399.7 6,399.7 6,399.7 6,399.7 6,399.7 6,399.7 6,399.7 Operating Expenses 23229.0 2,252.0 2,153.5 2,075.5 2,075.5 2,075.5 2,075.5 2,075.5 Operating Profit 1,290.8 4,147.7 4,246.2 4,324.2 4,324.2 4,324.2 4,324.2 4,324.2 Interest: IBRD 1 991.1 944.2 874.2 800.3 722.0 639.1 551.h Caisse Centrale / 105.0 10.0 1014.0 l.o 95.0 91.0 87.0 Total Interest 1,096. -1 1,o ,2 97.7 900.3 17.M 730.1 8.4 Depreciation 1,220.0 1,624.0 1,624.0 1,624.0 1,624.0 1,624.0 1,624.0 1,624.0 Total Operating Costs 3,449.0 4,972.1 4826.7 4,677.7 4,599.8 4516.5 4,429.6 4,337.9 Inventory Cost (credit) (239.0) - - - - Net Profit (before taxes) 309.8 1,427.6 1,573.0 1,722.0 1,799.9 1,883.2 1,970.1 2,061.8 Operating Profit - % return on Total Investment - 10,1 10.3 10.5 10.5 10.5 10.5 10.5 % Return on Share Capital plus Shareholders' Loans 1.4 6.7 7.4 8.1 8.5 8.9 9.3 9.5 1/ Charged to Construction and Capitalized. ANNr4 Page 1 C0Oi4IL 0 G ASSUMPTIONS FOR PROFITABILITY ESTI-ATE The profitability estimate is based on the following assumptions: 1) The price of manganese ore (CIF port of destination) would be 80.80 per long ton unit, the present day ecuivalent of $0.67 per long ton unit in terms of the 1947-1949 dollar; 2) Earnings would be based on production and sales of 500,000 tons of ore containing 44.73% manganese on a wet basis (equivalent to 49.7% manganese on a dry basis). This would correspond to F.Fr. 13,912.47 per metric ton, FCB Pointe Noire; 3) Export taxes would amount to 8% of the FOB Pointe -Noire value of the ore; 4) The cost of construction based on today's prices would amount to F.Fr. 41.3 billion including interest during construction and would not contain any provision for price increases during the construction period; 5) Operating costs would be based on today's prices and would not contain any provision for price increases prior to starting operations except for African wage rates; 6) Depreciation would be based on straight line depreciation of fixed assets over 25 years; 7) The company would be able to secure long-term loans as follows: a) IBRD - $35 million (F.Fr. 17.29 billion equivalent) for 15 years, including a four-year grace period, at an in- terest rate of 5.75%. Amortization and interest payments would be based on even semi-annual installments due January 1 and Julyl. The first repayment date would be July 1, 1963; b) Caisse Centrale (already negotiated) - F.Fr. 3.5 billion for 30 years, including a six-year grace period, at an interest rate of 3.01". Amortization is to be based on constant semi-annual installments starting June 30, 1965. There is a clause providing for accelerated repayment if production and sales receipts rise above a certain level. It has been assumed that this clause would not become effective. AIqE X Page 2 8) Shareholderst loans would amount to F.Fr. 16.271 billion by the end of the construction period including F.Fr. 1.936 billion capitalized interest; 9) Taxes would not be paid on the profits shown. Taxable profits would be calculated in accordance with actual financial agree- ments. COMILOG INCME FSTIMATES (Million 0rench Francs) Year Eaded Decerber 31 1962 1963 1964 1965 1966 1967 1968 1969 Production - Tons 325,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 Sales - Tons 275,000 500,000 500,000 500,000 500,000 500,00 500,000 Gross Sales - FOB Pointe Nalire 4,542.8 8,259.6 8,259.6 8,259.6 8,259.6 8,259.6 8,259.6 8,259.6 Export Tax - 8% 363.4 660.8 660.8 660.8 660.8 660.8 660.8 660.8 Net Sales ,179.T 7,59 8., 7,598.8 Operating Ezpenses 2,229.0 2,567.8 2,468.8 2,390.8 2,390.8 2,390.8 2,390.8 2,390.8 Operating Profit 1,950.4 5,031.0 5,130.0 5,208.0 5,208.0 5,208.0 5,208.0 5,208.0 Interests IBRD - 991.1 944.2 874.2 800.3 722.0 639.1 551.4 Caisse Centrale - 105.0 105.0 lo4.o 100.0 95.0 91.0 87.0 Total Interest 1,096.1 1,049.2 97T.2 900.3 17.0 730.1 Depeciation 2,588.0 3,450.0 3,375.0 3,35o.o 3,350.0 3,350.0 3,35o.o 3,35o.o Inventory Cost (credit) (239.0) - - - Total Operating Costs 4,578.0 7,113.9 6,893.0 6,719.0 6,61a.1 6,557.8 6,470.9 6,379.2 Net Profit (Loss) before Taxes (398.6) 484.9 705.8 879.8 957.7 1,041.0 1,127.9 1,219.6 Incosme Taxes Eet Exempt - - - - - 13.1 Net Profit (Loss) after Taxes (398.6 484.9 705.8 879.8 .7 1,041.0 1 7 1 6. Not Profit - % Share Capital plus Shareho3lers' Loans - 2.1 3.1 3.9 4.2 4.6 4.9 5.3 Long-Term Debt Service Coverage - Times Z4 1.8 1.8 1.8 1.8 1.8 1.8 Charged to Construction and Capitalized. After dedutlag equipment renevals from depreelation. ANNEX 6 COMILOG C4SH FOW FORECASTS (Milion French Francs) Total Through Construction Year ended December 31 1958 1959 1960 1961 1962 Period 1963 1964 1965 1966 1967 1968 1969 Sources 7rMots (Loss) before Interest and Taxes - - - - (398.6) (398.6) 1,581.0 1,755.0 1,858.o 1,858.0 1,858.0 1,858.0 1,858.0 Depreciation - - - - 2,588.0 2,588.0 3,450.0 3,375.0 3,350.0 3,350.0 3,35o.0 3,350.0 3,350.0 Share Capital 2,930.0 2,070.0 - - - 5,000.0 - - - - - - - Shareholders' Loans - 2,922.0 6,620.3 ,299.5 3,964.8 17,806.6 - - - - - - - MBRD Loan - 1,300.0 5,000.0 9000.0 1,990.0 17,290.0 - - - - - - - Caisse Centrale Loan - - 3,05.0 50.0 - 3,500.0 - - - - - - - Total Sources 2,930.0 6,292.0 .670.3 13,79.5 8,14.2 4,786.0 5031.0 5 ,130.0 5,208.0 208.0 8 5,208.0 5,08.0 Applications Fixed Assets (Including spares and iscellaneous depreciable items) 2,871.0 6,200.0 14,000.2 22,200.1 4,192.0 39,463.3 - - - - - - - Equipment Reewals - - - - 752.0 752.0 1,003.0 1,003.0 1,003.0 1,003.0 1,003.0 1,003.0 1,003.0 Working Capital - - - 200.0 1,242.0 1,442.0 - - - - - - - Interest on Loans: IBRD - - 225.5 538.5 857.0 1,621.0 991.1 944.2 874.2 800.3 722.0 639.1 551.4 Caisse Centra.q - - 57.0 105.0 105.0 267.0 105.0 105.0 104.0 100.0 95.0 91.0 87.0 Shareholders - - 92.0 387.6 705.9 996.2 2,181.7 - - - - - - - 05er 59.0 - - 59.0 - - - - - - - Total Interest 7 92.0 i70.1 ,39. 1,958.2 4,128.7 1,096.1 1,0oW.2 978.2 900.3 -77 730.1 T AmortLzation of Loanst IBRD- - - - - - 574.0 1,199.0 1,268.0 1,343.0 1,420.0 1,5o4.o 1,591.0 Caisse Centrale - - - - - - - - 1L6.0 1L6.0 146.0 116.0 146.0 Total AmortLzatian 57T.O 1,199.0 I,U70 1,566.0 1,60.0 1,737.0 Income Taxes - - - - - - - - - - - - 13.1 Total Applications 21930.0 6 292.0 14,670.3 1,749.5 8,lh4.2 45,716- 2.3n- 3,251.2 3,395.2 3392.3 3 386.0 3,383.1 3 391.5 Cash Suiplus f or year - - - - - - 2,357.9 1,878.8 1,812.8 1,815.7 1,822.0 1,824.9 1,816.5 Cash Available at Beginning of Year - - - - - - - 2,357.9 4,236.7 6,019.5 7,865.2 9,687.2 11,512.1 Cash Available at End of Year - - - - - - 2,357.9 4,236.7 6,010.5 7,865.2 9,687.2 11,512.1 13,328.6 _ Capitalized during construction period - not a cash disbursement - an equivalent amount has been added to Shareholders' Loans. ANNEX 7 COMILOG BALANCE SHEET FORECASTS (Million French Francs) Year Ended December 31 1962 1963 1964 1965 1966 1967 1968 1969 Assets Current Assets: Cash or Other 771 3,129 5,008 6,821 8,637 10,459 12,284 14,114 Securities 4 4 4 4 4 4 4 4 Receivables 425 425 425 425 425 425 425 425 Inventories Goods in Process 96 96 96 96 96 96 96 96 Ore Stocks 239 239 239 239 239 239 239 239 Stores and Spares 680 680 680 680 680 680 680 680 Total Current Assets T, 73 M T,-M I158W M 177M T13, Land 29 29 29 29 29 29 29 29 Fixed Asseta 42,883 42,883 42,883 42,883 42,883 42,883 42,883 42,883 Depreciation ~ 1 836 14 283 665 9 002 11 3149 13 69 103 8390 Net Fixed Assets U Total Assets 43.291 43,202 42,709 12175 41&6141 41.19 14,97 40,0810 Liabilities and Equity Current Liabilities: Accounts ayable 93 93 93 93 93 93 93 93 Due Long-term Creditors within 12 months 574 12199 1414 1 489 1 5 1,650 1 737 1830 Total Current Liabilities 97 292 I567 !9365 1743 Long-term Debts IBHRD 16,716 15,517 14,249 12,906 11,486 9,982 8,391 6,707 Caisse Centrals 3 5D0 3 00 3 3514 3 208 3 062 2 916 2 770 2.624 Total Long-term Debt T?z3 16'I1 t5559 Equity: Share-Capital 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 Shareholders' Loans 17,807 17,807 17,807 17,807 17,807 17,807 17,807 17,807 Earned Surplus (loss) (399) 86 792 1 672 2 630 3 671 4 799 6 019 Total Equity 407 7r, 23, 599 W- 91LM- F 2 t Total Liabilities and Equity 43 291 43202 70 41.644 4 105 0.0 Ratio - Long-term DebttEquity 47,63 s45s55 437 40:60 36t64 33s67 29t71 2476 ./ Including other depreciable expenses. Less expenditures on equipment renewals. ANNEX 8 C 0 M I L 0 G ASSUMPTIONS FOR FINANCIAL FORECASTS The financial forecasts are based on the following assump- tions: 1) The price of manganese ore (cif port of destination) would be $0.92 per long ton unit, equivalent to $44.15 per long ton of Comilog ore. This has been calculated on the assumption that the long-term price would be $0.80 per unit if the general level of prices were to remain unchanged (actual quotations are about $0.95); and that this price of $0.80 should be increased by 5% a year (since the estimate of mining costs assumes that the general price level will rise at this rate during the con- struction period). 2) Earnings would be based on production and sales of 500,000 tons of cre containing h,73% manganese on a wet basis (equivalent to 497% Pin dry basis). This would correspond to F.Fr. 16,519.20 per metric ton, fob Pointe Noire. 3) Export taxes would amount to 8% of the fob Pointe Noire value of the ore. 4) Depreciation would be the maximum amount permitted under Comilog agreements corresponding to about 7.7% of the original fixed as- seits annually. 5) The company would be able to secure long-term loans as follows: a) IBRD - $35 million (F.Fr. 17.29 billion equivalent) for 15 years, including a four year grace period, at an interest rate of 5.75%. Amortization and interest payments would be based on even semi-annual installments due January 1 and July 1. The first repayment date would be July 1, 1963. b) Caisse Centrale (already negotiated) - F.Fr. 3.5 billion for 30 years, including a six year grace period, at an in- terest rate of 3.0%. Amortization is to be based on constant semi-annual installments starting June 30, 1965. There is a clause providing for accelerated repayment if production and sales receipts rise above a certain level. It has been as- sumed that this clause would not become effective. 6) Shareholderst loans would amount to F.Fr. 17.348 billion equiva- lent during the construction period including F.Fr. 2.093 bil- lion capitalized interest. Interest would be at the rate of 6.5% non cumulatively during this period. Repayment of shareholders' loans would not start until after the IBRD loan is repaid. In- terest at an assumed rate of 6.5% would be payable to the extent earned during the operating period. Interest due on shareholders' loans would be used in calculating taxable profits. ANNEX 9 C 0 M I L 0 G CASH GENERATION IN UNFAVORABLE YEAR (Million French Francs) 1965 1965 Normal Unfavorable Sales - Tons 500,000 00,00 Price $O.92 long $0.80 long ton unit ton unit Gross Sales 8,259.6 5,565.0 Export Tax - 8% 660.8 h5.2 Net Sales 7,598.8 5,119.8 Operating Expenses 2,390.8 2,131.0 Operating Profit 5,208.0 2,988.8 Interest 978.2 978.2 4,229.8 2,010.6 Amortization 1,414,0 1,41h.0 Balance for depreciation and profit 2,815.8 596.6 Note: 1965 would be the first year of full debt service. ANNEX 10 Page 1 C 0 MI 1L 0 G TRANSPORTATUION SYSTEM a) Choice of Route and System The ore deposits are located at some distance from the coast in a rough and heavily forested region. Comilog retained Tippetts- Abbett-MIcCarthy-Stratton (TAMS) of New York to determine the most practical and economical route and method of moving the ore to the coast. During the period 1953/195 TAMS studied routes to four different ports based on various transport methods and combinations; i.e. railroad, highway, cableway, belt conveyor, barge, as well as pipeline and air transport. From these studies the best route, and the ore selected, was more or leos a direct line from the mine to connect w,ith the existing C.F.C.O. rilroad at a point near Dolisie, a distance of about 360 km. The least expensive method, from the standpoint of original investment and operating costs,appears to be a cableway for the entire distance. Several factors, however, ruled out the all-cableway choice; the operating uncertainties of along cableway, particularly under equatorial African conditian6, the maximum capacity limit of the cableway preventing easy expansion of output, and the desire of the Government authorities to open up the territory between tne mine and Dolisie. On the basis of t2ese considerations, it was decided to adopt railway trans- port betweon Dolisie and M?Binda (290 km.) and cableway between MBinda and tho mine (73 km.). M'Binda was chosen as the railway terminus because the con- struction cost of the railroad per kilometer between the mine and M'Binda would be more than double the average cost per kilometer up to MtBinda. This appears to be the most feasible solution at a production level of 5CO,000-850,000 tons annually. It also allows easy expansion above this level as the extension of the railroad to the mine becomes economic when the production level rises above 1.0 million tons per year. b) The Cableway The length of the cableway proposed by Comilog immediately raises the question of operation stability, Solvay has operated an 18 km. cableway for more than 30 years in France. This installation is divided into three 6 km. sections and moves more than 1.0 million tons per year. It operates year around, 24 hours per day with 12% downtime for repairs, maintenance and changing cables. However, this operating efficiency is possible only with experienced and skilled staff. This may be a major factor for the Comilog ANNEX 10 Page 2 cableway since there are not many major installations from which to recruit staff. Comilog is investignting the possibility of training employees at the Solvay installation as well as having some Solvay personnel at the Comilog installation for a limited time. While Comilog is working out the final details of the cable- way it is also continuing to investigate the alternative solutions of truck haulage and tractor trains, The latter, a new development by General Electric is a rubber-tired diesel electric locomotive which runs on concrete slbs pulling cars on rails attached to the slabs. Such trains can negotiate steep grades (up to 8%) and sharp curves. If Comilog should abandon the cableway for one of the alter- native schemes, the estimated investment or operating costs probably would not be changed appreciably. ANNE 11 C 0 MIL 0 G THE CHEMIN DE FER CONGO-OCEAN (C.F.C.0.) The C.F.C.O. extends from Pointe Noire to Brazzaville, a distance of 515 km. The railroad, under the old arrangements, was owned by the French Equatorial Africa Federation and managed as an autonomous agency. Since the dissolution of the Federation, the future status of the railroad has been under discussion but the existing agreements between Comilog and the C.F.C.O. would remain binding as far as the Gabon Republic and Congo Republic are concerned in view of the express ratification of the agreements by both republics. The C.F.C.0. is a well managed railroad. Maintenance of both roll- ing stock and track is good even by standards of more highly developed coun- tries. Although the track and rolling stock were badly run down during World War II, the rehabilitation program has been completed and today the facilities are in good condition. The road is fully dieselized. The C.F.C.O. has nearly completed the work required by the Comilog project such as the junction at kilometer 202. The mainline track between the junction and the port is being relaid with heavier rail (72 lb. instead of 60 lb.) and closer spacing of ties. The C.F.C.O. is in good financial condition in spite of the low traffic volume (162 million ton-km. in 1958). The C.F.C.O. has good workshops capable of major overhauls on its rolling stock, diesel locomotives and rail cars. In addition it operates a school to train operating personnel. Comilog has arranged for its crews to be trained under this program and has a number of men under training at the present time. Comilog intends to have its heavy maintenance and overhaul work done in the C.F.C.O. shops. The C.F.C.O. is willing to undertake this work so long as the Comilog equipment is similar to the C.F.C.O. equipment. Should Comilog choose locomotives which are unfamiliar to the C.F.C.O. mechanics, special arrangements will be required to provide the necessary training. BA NGU I * CENTRAL AFRICAN REP. C A M E R O ON S R I O OUESSO M U N ... % LIBREVILL CD 0gAYOK& 4(J G A B N G oNR o LAMBARENE LASTOURSVILLE ,MàANDA AZFRANCEVILLE Ch TCHIBANGA• • ZANAGA REPUBLICS OF B ZAVLLEe.GABON AND CONGO DOLISIE e d Roods POINTE NOIRE •+ Existing Raitway ++ Proposed Mining RoHlway o 5o 1oo 150 2ooKM -0-0-0- Proposed Cableway International APRI 199 ANOLABoundories A N G L ABdI APRIL 1959 IBRD-571 Map 2 MANGANESE MINES G A B Moond O N Fronceville GABON AND CONGO REPUBLICS TRANSPORTATION ROUTE: * FOR COMILOG ORE I . . Roads N ....... Existing CFCO Railway '.. 4.++4.4-4 Proposed Mining Railway gMinda* -*-*-0- Proposed Cableway * * .************ international Boundaries * ......~~ :.Mavoo. *..*...* .** .***.** . . ......* Divenie * Zanago *. Mossendjo z: 0 Poudi Komono Lovess,. R 4 /C 0 N G O ! S .*,Kibangou ** .Sibiti Loudima Projeced Oolsie&/ori R. Madingou l.%ou Kouilou Dam ..*......*****I POINTE * * NOIRE *. * C A B I N D A 1. -* 7* 0 0 20 30 40 50 Km APRIL 1959 IBRD-572 勺