Sixteen risks, four critical, and most of them concern iron units and energy

9.1 How the risks were assessed

The risks below were identified from the evidence in Chapters 1 to 7 and rated by Cameroon Steel’s analysts on two scales: the likelihood that the risk materialises over the next decade, and its impact on the chain if it does. Both are judgements, informed by the cited evidence; they are not probabilities. Each risk is paired with mitigations and with the party best placed to lead them. Figure 9.1 places the sixteen risks on a likelihood-impact grid, and Table 9.1 sets out the register.

Source: Cameroon Steel risk assessment based on the evidence cited in Table 9.1. Status: derived (analyst judgement).

9.2 The four critical risks

R1. Rebar saturation. Cameroon’s rebar capacity of 627 kt/yr is about 3.5 times domestic demand of about 180 kt/yr [C30]; the industry as a whole runs at about 50% [C38][C40] and held more than 30 bn FCFA of unsold stock in September 2026 [C41]. The Prime Minister’s committee on mines-metallurgy integration reached the same conclusion in April 2026 [Z79]. The region is filling up too: a 120 kt/yr scrap-based rebar mill is under construction in Gabon, which has cut VAT on local rebar, and 300 kt/yr bar and wire-rod mills were ordered in 2026 for Abidjan and Tanzania [C39][C52][A21][A22]. Any new rolling capacity that adds rebar without adding iron units divides a saturated market further.

Mitigation. Justify Phase 1 by its melt shop, not its rolling mill; compete on certified quality; offer merchant billets to the existing re-rollers, which import about 60% of their charge [C38]; move into medium and heavy sections, which are not produced in Cameroon (Chapter 3); and develop exports under AfCFTA, which the mines-metallurgy committee is already preparing [Z80].

Source: [C30] (capacity and demand), [C05] (exports), [C07] (Gabon and Congo imports), [C39], [A21], [A22] (new mills).

R2. Iron-unit shortage. National scrap arising was last measured at 53,000 to 61,833 t/yr [C42], local scrap covers about 40% of existing mills’ needs [C38], scrap prices have risen by about 30% [C40], and the leading producer is borrowing €40 m to import billets [C38]. RC-1 needs 0.36 Mtpa of metallics at Phase 1 and 1.21 Mtpa at full capacity, and assumes only about 30 kt/yr of domestic scrap (0 to 60) [F01]; contracted supply and the delivered cost of the imported HBI, DRI and scrap are not yet established. The global market for DR-grade pellets and merchant iron units is tight and expected to stay so until about 2030 [N01][N02][D12].

Mitigation. Long-term supply contracts for HBI and DRI from several origins; a scrap-collection programme that brings informal collectors into the formal chain; and the direct-reduction module on Cameroonian ore as the durable answer.

R3. DR-grade feed not yet available. Cameroon’s only code-compliant reserve is direct-shipping ore at 62.2% Fe [O05]. A 68% Fe concentrate suitable for direct reduction has been produced only in 2014 testwork [O04], and no concentrator or pellet plant producing DR grade is in any published plan.

Mitigation. Pilot-scale concentration, pelletising and reduction tests on Mbalam itabirite and Lobé magnetite; a grade clause in the 15% offtake terms; the DRI-plus-smelter route, which tolerates lower-grade pellets [N01], as a fallback; and imported DR pellets as a bridge.

R6. Firm power. Industrial demand of 150 MW was unmet nationally in October 2026 because of delays to the Nachtigal evacuation line [E16]; the Kribi gas plant ran at about a 30% capacity factor in 2025 [E15]; hydropower, about 90% of generation in 2025, is seasonal [E15]. RC-1 needs about 36 MW on average at Phase 1 and about 94 MW at full capacity, more with a DR module [F01].

Mitigation. Size Phase 1 within the initial 100 MW of the Kribi 225 kV supply, which is designed with N-2 redundancy through the southern grid [Z43], and agree with the grid operator an allocation of that shared supply and power-quality measures for the arc furnace (static VAR compensation, adequate short-circuit capacity); negotiate a high-voltage contract with a capacity charge and indexation; reserve the later 330 to 400 MW stage of the substation for the full chain [Z43]; consider dedicated generation, for example the unbuilt 114 MW extension of the Kribi gas plant [E25].

9.3 Severe risks to manage

R5. Gas reserves and price. Gas production is concentrated in the Sanaga Sud field, where about 600 bcf were developed for the LNG vessel and are in natural decline; certified remaining reserves are not public; and the larger Yoyo-Yolanda resource of about 2.5 Tcf needs about US$4 bn and has no investment decision [E02]. The applicability of the 70 FCFA/m³ tax on natural gas to gas used as a reductant is unclear [E11].

Mitigation. An independent reserve audit before the DR module; a long-term gas sales agreement with take-or-pay flexibility; a hydrogen-ready shaft furnace; and a modular DR plant that can start below 1 Mtpa.

R7. Import surges and policy reversal. Global excess steel capacity is expected to grow from 640 Mt in 2025 to 745 Mt by 2028 [G16]; Chinese billets traded at US$465 to 470/t FOB in October 2026 [G34]; and contractors on large public works have sought rebar imports despite the ban, as with the 7,300 t sealed at Kribi in 2020 [C20]. Cameroon has no trade-remedy practice in steel (Chapter 5).

Mitigation. Build anti-dumping and safeguard capacity; apply the national preference of the Finance Law 2025 [P18] explicitly to locally made billets and sections; enforce quality standards on imports as well as local products.

R11. Financing, foreign exchange and sovereign risk. The IMF rates Cameroon at high overall risk of debt distress [P32]; CEMAC foreign reserves fell to 4.2 months of imports at the end of 2025 [P07]; transfers above 50 m FCFA require central-bank authorisation [P10]; and the Finance Law 2026 prohibits payments to foreign suppliers without an effective transfer of funds [P11].

Mitigation. Structure financing with development-finance institutions and export-credit agencies; keep export revenues in offshore accounts where regulations allow; commit capital phase by phase rather than in one tranche; and use regional lenders already active in Cameroonian steel [C38].

R12. Capital-cost overrun and technology. Large steel projects overrun. Sweden’s hydrogen-based Stegra project raised €6.5 bn for its first phase in 2024 and has since sought additional funding as costs rose and its start slipped to 2027 [T24][T25][T26]; Nucor raised the estimate for its West Virginia sheet mill to US$3.1 bn in 2023 [T19]. For DRI-EAF plants, IEA-derived benchmarks span about US$510 to 1,310 per tonne of capacity in 2019 dollars [T02].

Mitigation. Proven technology from established suppliers; fixed-price contracts with performance guarantees; an independent engineer; and the phased design, which limits the capital at risk at each phase.

9.4 Likely but manageable

R4. Ore-project delays. Mbalam’s first exports moved from the first quarter of 2026 towards 2027 [O24][O28]; Kribi-Lobé moved to July 2027 [O35]; Grand Zambi’s first export has not been confirmed [O38]; Nkout is blocked by a dispute between investors [O47]. Because the phased chain does not depend on Cameroonian ore until the DR module, these delays affect timing, not viability.

Mitigation. Design Phases 1 to 3 on imported and local scrap and imported iron units; keep the DR module open to several ore sources; align the DR module with the Mbalam rail phase from 2030 [O25].

R9. Market scale. At 1 Mtpa, RC-1 would produce more than twice Cameroon’s 2025 chapter 72 imports [C05] and about twice apparent steel use [C40]. Without exports, the later phases would not be absorbed.

Mitigation. Trigger Phases 2 and 3 on evidence of demand; secure CEMAC and AfCFTA customers; consider HBI exports from the DR module into markets short of iron units.

9.5 Medium risks

R8. Price controls. Rebar prices are homologated by the Ministry of Commerce and producers accepted reductions in October 2023 [C44]. Mitigation: focus on products outside homologation; agree a transparent, cost-based formula for those within it.

R10. Regional rivals. Gabon’s new mills and VAT preference, and new mills in West and East Africa, will compete for the same export markets [C39][C52][A21][A22]. Mitigation: target products the neighbours do not make, such as sections and billets.

R13. Bulk logistics. The mineral terminal is at the memorandum stage, no railway reaches Kribi, and container import dwell times reached about 25 days in 2026 [O31][Z45][E45]. Mitigation: secure berth and storage rights in the planned terminal’s steel cluster [O31]; use the multipurpose terminal for Phase 1.

R14. Carbon rules on exports. The EU’s CBAM entered its definitive phase on 1 January 2026, certificates go on sale from 1 February 2027, and it covers DRI, billets, rebar, wire rod and pellets [D01][D02][D08]; free allocation for EU producers falls from 97.5% in 2026 to zero in 2034 [D07]; a UK CBAM applies from 1 January 2027 [D10]. Mitigation: measure and verify emissions from the first day; use Cameroon’s hydro-based grid; choose hydrogen-ready equipment.

R15. Skills. No Cameroonian institution offers a dedicated ferrous-metallurgy programme, although ENSP Yaoundé, the Ngaoundéré mining schools and IUT Douala provide relevant engineering and technician training [K02][K03][K08]. Mitigation: a training centre with these institutions and supplier training packages, consistent with the local-employment rules of the Mining Code [O36].

R16. Governance and reputation. Cameroon was suspended from EITI in February 2024 [O52], and lenders apply international environmental and social standards. Mitigation: an environmental and social impact assessment to IFC Performance Standards; publication of offtake terms under the 15% rule; transparent reporting.

Table 9.1 Risk register for a phased ore-to-steel chain

Source: Cameroon Steel analysis. L: likelihood; I: impact; H: high; M: medium. Ratings are analyst judgements.

9.6 The phased design is itself the main mitigation

Most of the critical and severe risks share a cause: they would all bite at once on a project that tried to build the whole chain in one step. A DR plant built before its feed, its gas contract and its market would face R2, R3, R5, R6, R9 and R12 simultaneously. A phased chain spreads them over time and attaches each to a decision point:

• Phase 1 faces R1, R2 and R6, and can manage them with its product mix and merchant billets, supply contracts, and an agreed share of the first 100 MW at Kribi;
• Phases 2 and 3 face R9 and R10, and should be triggered by demand;
• The DR module faces R3, R5 and R12, and should be built only when grade, gas and cost are proven.

This is the lesson of Chapter 4 restated as risk management: the countries that succeeded built in modules behind secure feed; the project that failed tried to do everything at once.