‘Green minerals can catapult Africa into the future’
Mining Indaba hears calls to rebalance the exploitative relationship between the continent and developed nations
● Amid a global scramble for renewable energy minerals, mining industry thought-leaders say the days of the one-sided relationship in which the developed world extracts lithium from Africa and sells it back as a battery are numbered.
The 30th Investing in African Mining Indaba brought into sharp focus the urgency for “critical minerals ”— a class of mineral resources needed to spur the global energy transition from fossil fuel-intensive power to renewable energy.
Demand is expected to double by 2030 and quadruple by 2050. An estimated 30% of total reserves are in Africa, including cobalt, copper and lithium. However, African leaders are calling for an even playing field after generations of exploitation.
According to the Centre for Strategic and International Studies, the African continent has an estimated 21% of the world’s graphite reserves, 85% of its manganese reserves and 47% of its cobalt reserves.
Zambian minister of minerals & mines Paul Kabuswe said his government had adopted an investorfriendly policy; investors entering the Zambian mining market would find the necessary infrastructure and be assured of policy certainty and political stability.
“We are not going to choke the private sector because our economy in Zambia is private sector driven. No more changing policies like jackets. We need you to find us in one jacket for the next five years,” he told attendees.
Efforts to establish mutually beneficial extraction relationships between Africa and the Global North were needed, Kabuswe added.
Peter Pham, a former US diplomat who was special envoy to the Sahel region, said the trade relationship between Africa and the developed world needed to be redefined for the planet to make the most of Africa’s critical minerals and realise a global energy transition.
“The old model is gone. If anyone thinks it can be rebuilt, it’s over. There has to be collaboration and the nature in which companies and governments work on the continent has to be recalibrated in a different way. That’s the only way this goes forward,” he said.
Pham said Africa had the opportunity now to leapfrog years of underdevelopment and underinvestment. Policy certainty and interventions to expedite mining processes from discovery to operation would be a strategic strength.
“This is Africa’s moment. We all know the data. We all know the mineral resources that nature has endowed this continent with. But the analogy I use… is the lesson of the hotel room. Tonight’s hotel room is unsaleable tomorrow and so Africa has to seize the opportunity now,” he said.
At a panel discussion facilitated by Control Risks, a global risk consultancy, the CEO of the Council for Geosciences, Mosa Mabuza, chided the firm for its reports, which he said had a chilling effect on investor appetite in South Africa and the rest of the continent.
“Your reports have a profound effect on investment decisions that are made and often I find that they are extremely critical of African nations, and sometimes overly critical beyond what we experience as people who live here, compared to other nations,” he said.
Advisory reports were important instruments in the investment pipeline as they influenced investment decisions, Mabuza said, but Control Risks should provide a fair assessment of Africa’s potential rather than “exaggerate” possible pitfalls.
Shawn Duthie, associate manager of risk at Corporate Risks, responded that the London-based firm knew the continent very well and that its reports sought to give a fair and balanced assessment.
“For me, sometimes I look at our South Africa reports and I go ‘Ah, s**t!’ Because I want to say, ‘Come invest in South Africa, it’s a great country, it has great people, it has great resources.’ But I think at the same time we have to be balanced and we have to be fair to the client and say ‘here are the risks you’re going to face’ and temper it and mitigate it,” he said.
A 2021 report by Control Risks flagged unrest and operational challenges in South Africa, saying “the situation remains tense and several potential triggers could prompt a resurgence in unrest and other security threats”.
A report by the consultancy last year said Africa’s largest mining jurisdictions displayed many vulnerabilities, from Ghana’s debt woes to South Africa’s load-shedding crisis, though the industry remained remarkably resilient.
“As a supplier of many of the world’s critical minerals for the energy transition, the continent and its mining sector are also increasingly at the heart of geopolitical competition,” the report states.
Mabuza said while he accepted the principle of fairness, “a province in Australia changes the taxation threshold for mining overnight. I don’t see a headline, no consultation, nothing. I don’t see you interpreting that as a risk for investment. If we did that in South Africa, it would be a crisis.”
He also lamented Africa’s underinvestment in geoscience.
“We know that in the African continent, the average investment in geoscience is less than $5/km2 compared with the Organisation for Economic Cooperation Development countries that are above $65/km2 . Now that difference … lays bare the challenge that is before us.”
Tanzanian deputy minerals minister Stephen Kiruswa said the country aimed to make the most of its endowment of critical minerals to aid the green transition and has introduced policies that will attract investment.
“We have the right policies in place. We have come up with mechanisms for investors and incentives that allow mining companies the opportunities to invest, get relief, access mining equipment, and ensure miners of all scales have a stake in building the economy,” he said.