Mineral beneficiation – Without political will, SADC will fall short
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By Ranga Mberi
THOUSANDS of years after the first miners dug up ore on
the continent, Africans are yet to figure out just how best to benefit
from their minerals.
Conventional thinking would have us believe mining only
started when columns of colonials rolled in on their wagons, bargaining
with locals, “discovering” gold and setting up the roots of the
multinationals we see today.However, mining in Africa is in fact as old as time
itself.
The Ngwenya Mines of Swaziland, according to UNESCO, were mined
an astonishing 40 000 years ago. In Zimbabwe, as across Africa, there
are heritage sites – many of which we have not protected well – that
show pre-colonial African expertise in mining.
While they traded much of their minerals, a lot of what
they dug up ended up on their necks and wrists as ornaments, or as tools
for farming and hunting. They were practising what today, centuries
later, is being debated in boardrooms, convention centres and in all
sorts of scholarly articles – mineral beneficiation.
Across Africa, next to resource nationalism, governments
are talking up beneficiation, or value addition, as the next frontier in
making sure Africa benefits more than it has, for centuries, from its
vast mineral wealth.
It is not a new debate. The AU Mining Vision, published in
2009, sought to find ways of driving this agenda. That document came at
the crest of the commodities boom, which had seen many mineral-rich
African countries boost their economies.
There was just one problem with all that. Mineral prices
move in cycles. African countries that have depended on resources such
as oil and metals know this all too well; you rely too much on
resources, and you are setting yourself up for trouble when prices
suddenly go through the floor.
The AU then came up with a plan. African countries, it
said, needed to ensure its minerals turned its economies into
diversified industrial hubs. No more should they just export minerals in
raw form, but they should use those minerals to drive industrial growth
at home.
It was a vision proposed in many plans at national and
regional levels. Among these were the Lagos Plan of Action, SADC Mineral
Sector Programme, Mining Chapter of NEPAD, and the Africa Mining
Partnership.
However, beneficiation takes more hard work than it appears.
Mining is capital intensive. Projects are funded decades
in advance, and by funders that demand assurances on resources and
guarantees on markets.
It will not only be the mines that will need a culture shift. Governments too will have to change their approach.
A good place to start is South Africa, the continent’s mining powerhouse.
A paper by South Africa’s Department of Mineral Resources
(DMR) found that it could not force beneficiation on mining companies
without first ensuring “intensive co-ordination” across a range of its
departments. The DMR found it needed to build new links between dozens
of departments; mineral resources, economic development, trade and
industry, science and technology, public enterprises, energy and
treasury, as well as business and labour.
Secondly, does Africa have the necessary infrastructure?
Beneficiation is an energy-intensive industry. It means the smelting and
re-smelting of production. Can our African power plants, already
struggling to cope with existing industries, meet the demand? Can we
supply power to these plants at competitive tariffs?
Thirdly, once we have produced all those value added
products, do we have the markets? Are we able to sell them at
competitive prices? Can we compete with the skills of jewelers in Italy
or the low labour costs of India?
How much have our African governments invested into
research and development?
Zimbabwe has recently sent diamond cutters for
training in China. It is a good step, but do we have enough skills
training plans to sustain all this going forward?
An idea would be to integrate regionally, and build, for
example, regional jewelry hubs. However, given the lethargy of regions
such as SADC on integration, is there much hope for this?
One can imagine governments developing special economic
zones that are exempt from duty and VAT for manufacturers. Factories
would need access to inputs at competitive prices. They would need good
incentives to invest in R&D.
The solution lies in our governments’ ability to make it
attractive for manufacturers to add value to our resources. They must be
able to do that at low cost, with good skills, using clean, affordable
energy. Only then would our products compete.
So, while beneficiation sounds nice in the bid boardrooms
and conference centers, the reality is somewhat tougher. Achieving it
will take huge political will, the likes of which many African
governments still find hard to muster – even after 40 000 years of
mining.
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