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 jewellers 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 jewellery 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 centres, 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. – This article was first published in The Southern Times.