The second African Union Conference of Mines ministers held recently, crafted a mining vision to ensure vast mineral resources on the continent could improve livelihoods of almost one billion citizens of the 54-member countries.
The conference brought together Mines ministers, senior government officials, donors, industry representatives as well as civil society groups to agree what each of them could do to take the Africa Mining Vision (AMV) forward.
A key premise of the AMV is mining should become a catalyst for broad-based sustainable development.
The vision argues until now, mining has been run as an enclave activity, meaning the economic and social linkages within Africa itself have not been as strong as they should be.
United Nations Economic Commission for Africa Regional Integration, Infrastructure and Trade Division director Stephen Karingi said he was frustrated by the fact that although Africa was rich in mineral resources, the continent continued to wallow in poverty due to lack of a common vision.
“I am quite sure I am not alone in expressing frustration as to why Africa has to continue to be poor given its abundant natural resources wealth! And we are all aware since about 2003, mineral commodity prices have surged on account of high demand in emerging nations like China, Brazil and India which are going through an unprecedented phase of industrial expansion.
“Yet we are further told Africa has not really benefited from these high prices due to a number of structural weaknesses in its mineral sector,” he said.
In 2010 alone, net profits for the top 40 mining firms grew by 156% to $110 billion and the net asset base of these companies now exceeds $1 trillion, yet the continent’s own share of the windfall earnings have been miniscule compared to what the companies got.
“The high earnings in the last seven years or so prompted countries like Australia and India to increase taxes on windfall earnings and yet here in Africa, we are hesitant to do so on account we might frighten away the goose and hence have no golden eggs,” Karingi said.
In addition, African mining regimes remain narrowly focused on the direct export strategic minerals to industrialised countries at the expense of the development of the continent.
Bad governance is also a major factor affecting the mining regimes in almost all African states as mining contracts remained mired in secrecy, marginalising local communities who are supposed to benefit from their resource.
African Union mineral resources acting director Jean Noel François said it was important for Africa to ensure its mineral resource served as an engine of growth and development long after the resource base has been depleted.
He said the AMV should ensure member countries improve on their mineral resource policies, establish appropriate institutional, legal and regulatory frameworks and invest in human skills, research and development.