The African Critical Minerals Summit opened at the Sandton Convention Centre this morning (2 Dec), reflecting perhaps why mining in African is at a crossroad that might just decide the future of the continent as a whole.
Africa sits at a junction where it holds a large portion of the mineral resources that are key to new technology developments across the globe, while not holding any of the downstream manufacturing that turns these minerals into substantial global players and economies.
One of many issues facing the industry is a lack of inter- African cooperation, as well as lack of actions by African governments to ensure that there is a regulatory and infrastructural environment for major Investments, not only in new mining operations, but also in the further processing of theses mineral resources beyond primary production into secondary industrial developments to create export products out of Africa.
Music Legend Challenges the Industry Influencers
Probably the most profound comment offered in the opening address was by South African music icon Yvonne Chaka Chaka, who commented that “History is made by those who are there”, underlining the fact that so few people who were supposed to attend had cancelled last minute or simply not arrived. The comment not only applies to today’s events, but resounds so much with so many of these talk-shop summits today.
The Mayor of Johannesburg, Dada Morero, failed to appear for his opening address, as did Dr McBride Nkhalamba, the Continental Secretariat, at the African Union’s Directorate of Peer review mechanism and the keynote address speaker Mr Patrick Lubega.
The Leadership gap in Africa was never better expressed than the fact that no one from the Department of Minerals and Energy were in attendance. Neither were there any major mining houses in attendance at the summit.
Real Value and Change must come from Africa Itself
The fact remains that while African leaders went cap-in-hand to China recently, and got a promise of a $51 Billion loan deal put on the table, China or any other world power today have their own agenda and interests at heart.
The bottom line is that Africa and African leaders need to start leading in place of bleeding Africa’s wealth to other nations. They need to work more co-operatively and build projects that can become sustainable drivers of economic growth instead of simply extracting taxes from extraction of minerals.
This is not where real value or industry is created and there may well be an argument that Africa should extract much higher prices on Mineral resources in order to build a manufacturing economy in other industries where they can become real players in the global market.
Revision of Pricing Structures Proposed
Dr Manie Kriel of VBKOM holdings, provides some context and says that “current prices of critical minerals are hugely undervalued, and the value is down the value chain, and how do mining companies claw back value here? It has to happen on the pricing structure, He commented. The I believe the pricing of minerals globally needs to make a step-change to really take this industry forward. He concluded.
Infrastructure and the regulatory environment for critical mineral extraction, still remains the major points of constriction in the industry and unless these are addressed effectively it is difficult to see any progress being made on the continent.
68% of junior Mining companies in South Africa cited that regulations in mining are restrictive while 23% say that lack of access to funding is a major challenge for them.
Dr Kriel says that only 3% of mining start-ups in the last 156 years has become a blue-chip mining house with 74% of mining companies generating zero taxable income.
China Won’t “give” Africa a Place at the Table
Euronomix CEO, and controversial commentator on the mining industry, Claude de Baissic, commented that “China is never going to let Africa have a place at the Table now”. They own the downstream processing of Metal production and they are not even interested in mining it. China owns only an 8% of global metal mining but have cornered the downstream metal manufacturing in everything from appliances to Automobiles and that is where they have made themselves into a global economic power.
If Africa wants to create sustainable economic growth, it needs to address the downstream manufacturing as a collective and the leadership in Africa needs to cooperate and build combined markets, infrastructure and energy generation to achieve this.
As starting point could be attending the summits arranged and targeted at finding solutions to these not so small challenges.
