by Grain Wyson Phillip Malunga FIMMM Mineral and Environmental Management Expert
The African Mining Vision and Agenda 2063 plays an important role in bringing sustainable development in Africa. Mineral beneficiation or mineral value addition will promote economic development and self-reliance in financing development programs.
The African Union (AU) adopted African Mining Vision in 2009 in order to bring meaningful economic development and social linkages through mining. In 2013 AU adopted Agenda 2063 in order to plant a spirit of self-reliance in fostering national development programs.
This philosophy has encouraged African countries to undertake mineral value addition or beneficiation in order to realise greater benefit from our mineral resources. Mineral beneficiation is transformation of a mineral or a combination of minerals to a higher value product which can either be consumed locally or exported. Africa has lost much needed technological revolution, revenue and exported labour due to lack of mineral value addition. Some countries such as South Africa, Zimbabwe and Botswana are on the right path in adopting this concept. We have seen value addition for gold, copper, diamonds and platinum in South Africa and Zimbabwe while Botswana has started with diamonds.
How can we achieve mineral value addition in Africa? This is through reduction in export of raw minerals and investing in industrial inputs such as energy, water, and technology to encourage beneficiation. Where economies of scale are limited, there is need to look at regional centres for mineral beneficiation or value addition. A good example is for South Africa to specialize in gold and platinum group of metals, Botswana in gemstones, Zambia in copper, lead and zinc, Zimbabwe in nickel and platinum while Malawi can specialize in niobium and rare earths.
These initiatives will create economic linkages:
- Government benefits from fiscal linkages that include higher taxes, royalties and state participation through a special investment vehicle.
- Attractive backward linkages include local content such as provision of goods and services that arise from local employment, local training and local contracts. It should be noted that foreign companies benefit from less expensive local employees and locally manufactured goods.
- Knowledge based linkages emerge through research & development and human capital development to support local industries.
- While government attracts investment though provision of basic infrastructure, the extractive industry develops its own reliable infrastructure such as off grid power, multi-purpose dams, information and communication technology and transportation. Government can benefit from this through public private partnership in order to facilitate economic development in rural areas.
Mineral beneficiation adds value to mineral products and fosters economic development through infrastructure provision, technological evolution, local content enhancement and skills and employment creation. Domesticating the AMV and Agenda 2063 should be a priority at national and regional level in order to benefit from economies of scale. Public Private Partnerships should also be encouraged.
This piece was initially published in Malawi’s Mining & Trade Review Issue Number 56 (December 2017).