The African paradox - a rich, but poor continent

Mining can change this

Most developed countries in the world today boast no or very little minerals resources, their success has been through the exploitation of the developing world, in particular Africa. Mining has the potential to change this scenario and is critical to Africa’s development, says Dr Nkosazana Dlamini Zuma, the African Union Commission chairperson. She was addressing the Junior Mining Indaba held recently in Johannesburg.

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“We need to change our mindset and explore our own resources, negotiating contracts for Africans and increasing the value add to our natural resources so that we cease to export raw materials, and create better economic opportunities.”

“Agenda 2063 is accelerating African mining with its vision of the transparent optimisation of exploration and sustainable development of the sector. At the core of this lies the vision that the resources of the continent be better utilised for the good of the continent.”

This will require a strong will and cohesive policies, the strengthening of institutions and increase of tax collections together with a framework to develop the skills, if we are to take charge of resources to industrialise our economies.

Links with communities

Developing mining is linked to building infrastructure. She says we need to move away from the classic picture of mining as a small island of efficiency while the communities surrounding them are in the dark with no electricity, schooling and infrastructure. At the same time there needs to be a focus on beneficiation of all the resources currently exported. “There are a number of economic factors that are in our favour, providing us with a window of opportunity in this regard.”

Deputy minister of minerals and energy, Godfrey Oliphant, adds that communities matter. “Where mining companies take communities seriously, there is peace. Investors might invest in our companies, but mines operate within communities.”

Focus on junior mining

“With the overall state of the mining sector nowadays and given the economic environment, the growing financial markets volatility, and the general expectations around the commodity markets, the focus on junior mining is both timely and critical for policy engagements,” he says.

Junior mining is of growing importance for the mining industry in South Africa and it’s widely known that despite the country’s considerable natural endowment of resources, one of the key trends of the recent past has been the substantial fall in South Africa’s share of global exploration and prospecting investment. “We need to reverse this trend if we hope to promote junior miners and emerging mining companies. Prospecting is the only route to the establishment of growing mining companies, and it is the practical means of replacing our old and ageing mines.”

Doing things differently

If we, in South Africa, are to succeed in extracting maximum benefit from our mineral endowment, we must do things differently, with the operative words being ‘doing differently’. This means doing governance differently and it also means the industry must rethink its organisational and operational processes.”

The deputy-minister points out that we cannot afford to go through another decade of declining mining sector output, loss of global ranking and more importantly a free fall in our global share of exploration investment.

“Rather, a decade from now, we should boast a burgeoning of emerging mining companies, driven by a meaningful number of new players, which are underpinned by sizeable firms in the industry, recognised for their drive and expertise.”