Mining in Africa benefits and Challenges

There is no other continent that is truly endowed with the abundance of natural resources like Africa (90% of all known metals are found in Africa). The continent is a major producer of several metals including Diamonds, Gold, Uranium, Manganese, Bauxite, Nickel, Cobalt, etc.  

Copper wires

However, Africa does not benefit from her abundant natural resource at a significant level to impact economic development and remove most of her population out of poverty.  Africa has about 35% of the planet's mineral reserves, including 50% of gold, 70% cobalt and 92% of the world's platinum group metals.

Gold bars

Variety of precious stones

Africa is well endowed with fossil fuels and gas resources. However, knowledge about the quantities of these resources is limited and a comprehensive, country-based assessment still remains a challenge. However, new discoveries of oil and gas resources on the continent continue to emerge and present unique economic opportunities. However, the exploration and exploitation of these resources are yet to benefit the populations.  Nigeria, for instance, has been exploiting oil resources for the last 50 years and is now the world’s fourth largest oil exporter. Yet, its human and physical capital development is assessed to be 400 percent lower than it would have been if the oil revenues had flown into public funds, and if such funds had been utilized in the public interest to generate economic opportunities for all.  This is often in stark contrast to Middle Eastern oil producing countries such as Oman, Kuwait, etc.

Oil Refinery

Metal Market trading

The increase in exploration and mine development in Africa has been primarily focused on Copper, Gold and Diamond exploration, now Iron, Manganese. Most African governments have failed to focus on turning mineral raw materials and crude oil into finished products. They export copper cathode only to import copper wires, they export crude oil only to import refined oil which defies logic and conventional wisdom. This ignorant act only benefits the countries that turn raw materials into finished products in terms of jobs and revenues.  There is also an issue of location in terms of trade of mineral commodities, For example, major mineral markets and exchanges are in countries that do not produce Copper, Iron, Manganese or Diamonds.  Thus, the non mineral producing countries through self-interest unethically control both the market and production of finished products.  African countries that produce ores are often left at the mess of the volatile metal markets despite the tremendous abundance and potential for base metal and industrial mineral deposits.  

In Africa the mining industry is dominated by South Africa, Ghana, Zimbabwe, Tanzania, Zambia and the DRC while Angola, Sierra Leone, Namibia, Zambia and Botswana rely heavily on the mining industry as a major foreign currency earner.  Imagine what happens to the economies of these countries that heavily rely on mining when the prices of base metals tumble.

Southern Africa

African governments do not in principle benefit from the rise of prices of commodities on metal exchange markets and without windfall tax they are left to earn only what each national taxation rules entitles them from mineral wealth.  What mining companies are certainly good at like any other businesses are negotiating with desperate African governments tax exemptions and anything that protects their interests, maximises profits and minimises social responsibilities.  There have been recorded incidents in Africa where villages have been removed from their ancestral homes on the promise of a stake in mining revenues which often has turned out to nothing more than a pipe dream.  Africans have something that the world needs and yet Africans do not benefit from their wealth in the same way Arabs benefits from oil.  The only way is to create a system that favours and allows maximum return from mineral wealth for Africans.

Certain African countries are still recovering from the problem of using mineral proceedings to fund civil wars.  It is reasonable to suggest that civil wars benefited warring cold countries interested in creating buffer states in Africa and usually war lords within these countries fought with weapons paid for using diamonds from Africa and these blood diamonds are often traded in cities such London, New York, Paris.  The other reason why Africans do not benefit from mineral wealth is bad management practices by African governments i.e. corruption, greed, etc.  In addition, most African governments use their land and mineral resources as a guarantee to get loans from financial institutions and richer countries from the west and east often at high interest slave rates. African government are notorious for negotiating good sounding deals but with bad conditions while dangling available resources as security.  

River pollution

Chemical pollution 

Despite new mines opening in Africa or under development Africans are not benefiting from these resources.  There are other major concerns to do with bad mining working conditions for locals in foreign owned mines.  Some foreigners operating mines in Africa even threaten governments to pull out every time there is a complaint against bad working practices or discussions on introducing government earners like windfall taxes, things that would be implemented if those foreign mining companies were operating in their own countries.  There are been recorded incidents were foreign owned mining companies have taken advantage of lack of stringent environment laws or situations where governments appear to ignore poor working conditions and bad mining practices for fear of losing investors. 

Everybody knows that mining waste takes up a great deal of space, travel through mining countries and visit sites yow will find that it blights the landscape and often affects local habitats. 

Miners in Zambia

By its very nature it can constitute a serious safety hazard.  Lack of environmental control and management allows chemicals and other poisonous acids to filter through to the water table and have the potential to damage at a large scale and contaminated dusts and chemicals from smelters can be spread by the wind, and can also pose a very serious health risk.  Having said all this, there are foreign mining companies operating in Africa that exhibit professionalism, efficiency, work to agreed international standards employs environment best practices.