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A Series on African Successes. We discuss Mining!

Although Africa’s success prospects are overall bright, they differ not only country by country, but also sector by sector. In this article we discuss 1 out of a series of four sectors; Mining, Tourism,Infrastructure and Agriculture! Please add any comments or ideas below!

MINING

In Southern Africa mining is an industry of strategic importance, with roughly half of the world’s Diamonds, Platinum and Vanadium originating in the region, along with gold and cobalt contributing 36% and 20% respectively.

These minerals contribute greatly to several Southern Africa Development Community (SADC) Member States gross national product and employment. Many of the Member States depend on mineral exports for their foreign exchange earnings.

After recognizing the significance of the mineral industry within the region SADC then launched the Protocol on Mining in September 1997, which came into effect February 2000, and has come to form the basis for SADC’s work program on mining.

This Protocol aims to develop the regions mineral resources through International collaboration, in turn improving the living standards of the people engaged with the mining industry.

The Protocol on Mining

Member States of SADC have been engaged to harmonize their policies and procedures for mineral extraction, cooperating on improving technical capacity and sharing knowledge.

SADC Member States also agreed to encourage private sector developments, including small scale projects that promote economic empowerment of those who have been historically disadvantaged in the mining sector. They came up with this agreement with a goal to grow the mineral industry in Southern Africa.

Mining can also be a hazardous undertaking; the protocol on mining therefore requires that member states observe internationally recognized health, safety and environmental protection standards.

To facilitate these goals, the protocol on mining calls for an organizational structure consisting of a Committee of Mining Ministers, a Technical Committee of officials, and a mining coordinating unit to oversee mining operations and ensure that applicable standards are upheld.

As part of efforts to implement the protocol on mining, the SADC Secretariat, working with the United Nations Economic Commission for Africa, Southern Africa office (UNECA-SA) developed a framework for ‘Harmonisation of Mining Policies, Standards, Legislative and Regulatory Framework in Southern Africa.’

The Framework was approved by the SADC Mining Ministers in March 2006 in Antananarivo, Madagascar.

Subsequently the SADC Secretariat partnered with UNECA-SA to develop an implementation Plan, to translate the Framework into an operational programme of activities. The resultant Harmonisation Implementation Plan was adopted by SADC Mining Ministers at the meeting held on 12th November 2009 in Kinshasa, Democratic Republic of Congo. The Harmonisation Implementation Plan has eight themes or areas of work grouped into categories of related activities.

Since releasing the Protocol on Mining in 1997, SADC has organized several activities to promote mining investment, such as the SADC-EU Mining Investment Forum – Mines 2000 and the Australia – SADC Forum.

Both forums successfully boosted awareness of the regions mineral abundance and directly spurred investment in the region.

The Protocol on Mining also prompted several member states to sign bilateral agreements with countries outside SADC, which has boosted investment.

A recent example is that of Tanzania, which attracted considerable investment after it modernised its mining legislation, following encouragement and support from SADC. It is now one of the SADC’s region’s leading gold producers.

In the past before the launch of the Protocol on Mining, illegal mining and trade in gemstones has been used to fund conflict in parts of Southern Africa. This practice had a devastating effect on the people living in conflict areas and SADC is committed to eliminate this practice. In 2000, SADC took action to prevent the trade in illegal diamonds from affecting the legitimate ones.

The United Nations followed the recommendations of the committee of Mining Ministers and supported certification for rough diamonds, known as the Kimberly process.

In 2003, the Kimberly Process certification scheme was launched, ensuring the implementation of a series of United Nations Security Council resolutions and sanctions on trade in conflict diamonds and as a result promoting international peace and security.

 

CASE STUDY: BOTSWANA

The successes that have been achieved have come about mainly as a result of changes the government initiated in the economy as a whole, as well as some new policy measures that were instituted specifically for the mining sector.

More specifically, Botswana has benefitted from being the world’s largest producer of diamonds. Botswana formed a partnership with DeBeers to form Debswana. Ownership is split 50% between the national government and DeBeers. Debswana has the sole right to mine diamonds in the country. DeBeers clearly has some technical know-how when it comes to diamonds, and they have been extremely successful in developing mines in Botswana. DeBeers benefits from this arrangement, but so does the government: diamond mining generates foreign currency (accounting for 70% of export earnings) and constitutes a full 33% of the country’s GDP.

Lucrative diamond exports have enabled further economic and social development. The country has put in place many business-friendly incentives and policies to build up a service-sector economy. Socially, the government is progressive and forward-thinking, as evidenced by their policy of providing free anti-retroviral treatment to combat HIV/AIDS.

If there’s a take away from Botswana’s developmental story, I think it’s that economic success and development can become a self-fulfilling prophecy. A successful public-private partnership demonstrated financial benefits, and Botswana began to earn a reputation as a responsible, stable African government. That perception brought in more foreign capital, which has spurred more business-friendly policies, incentives, and trade agreements.

Now GDP per capita is a respectable $14,000 per year, and more and more people in Botswana have a stake in society and the country’s continued economic success.

The initiatives and policies put in place by SADC and other governments of African countries have brought about significant growth prospects to the mining industry, as well as safety and the elimination of conflicts in Diamond Mines in Africa. Given all that we believe the future of Mining in Africa is very bright.

In our next article we will examine Africa’s success in the Tourism industry, don’t miss our next article.

Images from theconversation.com

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