Socio-economic stakes of mining exploitation in Africa
Holding on October 4 and 5, 2019 in Brussels, the sixth edition of the Rebranding Africa Forum will have as theme: “The socio-economic challenges of mining in Africa“. This theme is all the more appropriate as the explosion in demand for raw mineral materials in emerging countries is creating an unprecedented situation, which is reflected in a tight supply situation and a sharp increase in metal prices, which have tripled, on average, since 2002. This mining boom has led to an influx of resources on the African continent, which has a significant share of mining resources (30% of bauxite, 60% of manganese, 75% of phosphates, 85% of platinum, 80% of chromium, 60% of cobalt, 30% of titanium, 75% of diamond and nearly 40% of gold, etc.); estimates are constantly evolving, as new deposits are discovered. As a result, the continent, whose majority of countries depend on annuities from subsoil products, now hosts seven of the ten fastest growing economies in the world.
However, this growth is not equally distributed, particularly in sub-Saharan Africa, where more than half of the population lives on less than $1.25 a day. Worse still, the regions with the most mineral resources are paradoxically often the poorest and most scarred by conflicts to harness these resources. Therefore, today, the crucial challenge for Africa is more than ever to take full advantage of the soaring prices of mining resources so as to lay the structural foundations for an endogenous, inclusive and sustainable development. However, the road to this development is fraught with weaknesses to be overcome, and above all with challenges to be met.
Amongst the weaknesses, we can in particular note the following:
- The duality of interests between the States holding the resources and the foreign companies that exploit them, the latter being little or not concerned by the negative externalities of their activities, particularly in environmental and socio-economic terms.
The low exploitation of mining potential, because, with the exception of South Africa, this potential remains relatively under-explored and open to foreign operators.
- The lack of transparency or democratic control in the management of these resources.
- The relative weakness of the normative and regulatory framework.
- The absence or insufficiency of local skills
- The low involvement of local economic actors, etc.
These weaknesses suggest that there are many challenges to be addressed if the mining sector is to truly serve as a lever for sustainable and inclusive development on the continent.
- The challenge of local participation and expertise to be developed to support the State in the control, exploitation and management of its mining potential, in order to guarantee the best local interests and inclusive development.
- The challenge (test) of democratic governance, in order to put the development of mining capital at the service of preserving and promoting socio-economic and environmental capital.
- The ecological challenge, to be met in order to maximise the greening of mining in Africa, a greening that will itself be a source of job creation and development opportunities.
- The challenge of local transformation, to improve the added value of mining, to foster the creation of a strong and relatively stable domestic market, taking into account the continent’s demographic prospects and the energy needs they indicate.
- Finally, the economic and financial challenge, to create the appropriate partnerships and incentives to make the mining sector sufficiently attractive, and thus able to mobilise the enormous long-term resources required for its exploitation.
It is by addressing these and other challenges that economic growth from mining in Africa will no longer be accused of being ultimately impoverishing, because it will irreversibly destroy our environmental and socio-economic potential. The ultimate challenge is therefore to create the conditions, mechanisms and dynamics so that the wealth created by the mining sector permanently feeds the structuring sectors of our economies, contributes to improving the level of economic and political governance, the quality of the natural environment and institutions, corrects socio-economic inequalities and thus ensures the overall sustainability of mining operations. How can this be achieved, in the interest of all stakeholders in the sector, States, investors, mining companies, present and future generations, etc.?
This is the challenge of this sixth edition of the Rebranding Africa Forum. It will mobilise the main mining, financial and economic players as well as leading techno-scientific skills on October 4 and 5, 2019 in Brussels.