Africa is a mining continent with minerals representing more than 60% of the continent’s exports but much more needs to be done if the continent is to get maximum benefit from exploitation of its vast mineral resources. The African Mining Vision (AMV) adopted by the Africa Union in 2009 is the vehicle to help achieve this, however there are many areas that need to be addressed in order for it to have full effect.
These include more transparency and accountability; minimising corruption of public officials; more balanced mining regulations, taxes and fiscal policies; greater and more effective foreign investment; improved public engagement, linkages and ownership; more value adding; investment in technology and innovation; better quality human resources achieved through training; improved infrastructure; and better geoscience capabilities.
An excellent recent commentary by Claude Kabemba in the Daily Maverick outlines what needs to be done to see the AMV gain greater traction. He says that the goal of the AMV is to underpin broad-based sustainable growth and socio-economic development.
As such, the AMV needs to be the continent's reference policy for transformation of the mining sector, thus creating wealth for all Africans and resolving the challenges of poverty, inequality and unemployment.
It is important that this be allowed to happen by governments of all African nations otherwise the AMV may go down the same unsuccessful path as other similar initiatives, including the Abuja treaty and the Legos Plan of Action. The African state must be the driver of resource management and must construct the foundations for developing a world-class mining administration.
Claude Kabemba says the interference of politics in resource management must be reduced but on the other hand strong government institutions are needed to negotiate contracts, collect and manage mineral rents, and enforce regulations. They must also sanction companies that do not respect laws and regulations.
Corruption is an area that must be reduced, or better still removed, if resources are to help resolve Africa’s challenges. Transparency and accountability must be promoted as people are entitled to know how private investors come to own mines, how much they produce, how much they pay to the state and how the state uses these revenues.
An imperative is the need for mineral producers on the continent to start adding value to the minerals locally and stop exporting them raw. The AMV seeks to break this tradition but this will only happen if Africa invests in science, technology and innovation to create the necessary linkages. Claude Kabemba says, “Unfortunately, most African governments do not understand the importance of a knowledge-based economy. Experience teaches us that countries that achieve a knowledge-based economy are those that take a decision for inward-looking policy.”
He says foreign investment is crucial to developing the mineral sector but predictable legislations and policies need to be in place to facilitate this and these need to be transparent. This will only happen in consultation with all stakeholders. He says a problem with the industry if the fact that policies and regulations change with every new minister of mines or new government.
Mining contracts also need to be fair across the board and not undermine the development of host countries while fiscal regimes need to be fair and equitable. The same is true of taxes and royalties but optimisation of revenue for countries will not occur unless the fiscal regimes do not encourage tax evasion and avoidance. Mine ownership must be shared, whether this be through joint ventures or equity stakes, but this must be equitable for all parties.
Claude Kabemba says the industry will not flourish without investment in key infrastructure at regional and national levels, including roads and rail transport networks, energy, water and communications. At present these inadequacies are causing large quantities of frustration for mining companies and inhibiting foreign investment. There also needs to be investment in human resources ads the industry needs a well-trained and equipped labour force.
He highlights geoscience as an area that will drive the industry. “Africa cannot draw maximum benefits from its minerals if we do not know what we have. Geological and mineral information systems become the most important imperative.
In conclusion he says these areas will provide the direct linkages that the AMV needs to achieve its aim for mining to develop to its maximum potential in Africa.
Yolanda Torrisi is Chairperson of The African Mining Network and comments on African mining issues and the growing global interest in the continent. Contact:email@example.com