By Lisa Vives, Global Information Network
NEW YORK | CAPE TOWN (IDN) – African leaders had a new message for foreign companies seeking the diamonds, gold, rubies and emeralds so plentiful in desperate dirt-poor countries and so pricey when polished and sold in New York, Paris and Switzerland.
We’re no longer a cheap date. That message – in so many words – was heard again and again at this year’s posh African Mining Indaba (February 3-6) – a glittering conference in Cape Town, South Africa, that unites investors, mining companies, governments and stakeholders from around the world with the single goal of advancing mining on the African continent.
Not every African leader was threatening to pull “unusual tax incentives” from contracts with western companies. But at least one president drew a line in the sand, declaring it was simply unjust that Africa, rich in minerals sought after by the world, should remain inhabited by the poorest people in the world.
Mining deals must be more beneficial for Africa, declared Ghana’s President Nana Akufo-Addo, as he pressed governments to end fiscal incentives traditionally used to attract investments in countries rich in resources but considered high risk.
“We want you here for the long-term,” he continued, addressing the mining executives from wealthy countries. “Respect the land that provides the riches and be part of the transformation. It’s time to make Africa prosperous and allow her people to attain a dignified standard of living.”
“We should not have to give unusual tax and royalties incentives. And mining companies should not expect to make extraordinary profits on our continent.”
President Akufo-Addo stated: “We must strike deals that are fair to both sides, and can reassure the long-suffering African people that they are no longer being unfairly treated”, adding that, “reviewing mining contracts is important for more than earning greater revenues.”
While he acknowledged that companies that come to do business in Africa must make their profit, he also made clear the need for them to function under conditions that pertain in other parts of the world.
Africa’s mining sector has always been a hotspot of global interest; countries like Ghana and South Africa continue to be world leaders in the mining of gold and the continent as a whole holds 22% of the world’s gold production.
Congo and Botswana also produce 55% of the world’s diamonds and overall, 30% of the world’s global mineral reserves are found on the continent. These include gold, diamonds, cobalt, copper oil and natural gas, among others.
In spite of past exploration efforts, continued investments and the prospects that Africa’s mining industry holds, various reports indicate that only 5% of the total global mineral exploration and extraction budget is invested in the continent.
While this may be regarded as a slow pace in development, in many ways, it highlights the potential of Africa’s mining industry, especially given the right regulatory and legal frameworks.
The potential and growth of the mining industry, as well as a need for transparency and regulation, were amongst key issues tackled at the annual Mining Indaba conference solely dedicated to the successful capitalisation and development of mining interests in Africa.
Over the past decade, a number of African governments have reviewed mining contracts, seeking to increase their share of mining profits.
Last year, the Democratic Republic of Congo – the world’s biggest producer of cobalt – rewrote its mining code, ignoring the objections of miners. It cancelled existing stability clauses in contracts and raised royalty rates across the board.
Neighbouring Tanzania, once one of Africa’s best bets for international investors, also cracked down, hitting gold miner Acacia with a $190 billion tax bill.
The company has disputed the claim and its parent company Barrick Gold Corp is in talks with the government.
But other African nations, including Angola and Ethiopia, are still seeking to use tax breaks to entice investment to their nascent mining sectors.
Resource nationalism was high on the agenda at the just ended 25th African Mining Indaba.
Long a major gold producer, Ghana is now seeking to develop its iron ore and bauxite deposits.
“Africa has made the world rich with our minerals, our gemstones adorn crowns and homes around the world, it is time to make Africa prosperous, and enable her people to attain a dignified standard of living. Join us in this exciting project for sustainable economic growth,” President Akufo-Addo said. [IDN-InDepthNews – 12 February 2019]
Photo: President Nana Addo Dankwa Akufo-Addo. Credit: GhanaWeb.
IDN is flagship agency of the International Press Syndicate.
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