AS the world intensifies and accelerates plans to shift from fossil fuel to more eco-friendly renewable alternatives such as hydro, solar and wind energy, discussions on how to ensure a just transition, especially for economies that are reliant on non-renewable fuel sources, are critical.
The 13th edition of the Alternative Mining Indaba, as well as the Mining Indabas held in Cape Town, South Africa from May 9 to 12, 2022 provide a platform to identify the opportunities and threats that could result from this shift. Governments, civil society and corporates in the mining sector convened to craft a path towards a transition to clean, sustainable energy.
The Russia-Ukraine conflict has highlighted the unsustainability of fossil fuel use and reliance for global economies. Price fluctuations, economic frangibility and environmental damage are some of the costs associated with the dependence on fossil fuels as high fuel prices result in poverty, further widening the inequality gap, the need for an alternative that is sustainable, accessible and eco-friendly is evident. The transition to clean energy sources will help solve the climate crisis, but is Africa ready for the transition, and how just is this transition?
For the transition to kick off there is need for a US$5,7 trillion financing per year until 2030. Thus, it is key to question who will be funding this transition. Africa is already riddled with poverty, underdevelopment, debt, financial leakages and the misgovernance of natural resources.
The danger that the transition may not be just for all countries is substantive because most African communities are already energy deficient. Countries such as Zimbabwe, South Africa, Niger and Nigeria mine and use coal as a major source of energy. Hence a rushed and ill thought energy transition will put economic pressure on such countries and some that are in debt distress and result in an unjust transition.
Mining informs the greater part of the transition as there will be higher demand for green minerals such as cobalt, lithium and copper which are used in the production of renewable energy systems. This condition will result in a scramble for minerals and Africa may find itself suffering the consequences of this scramble. If the transition is not well managed, it will lead to a mineral drain that will only assist developed countries achieve its transition plans.
The mining sector is a huge contributor to Green House Gases (GHG) and it must decarbonise to lessen its contribution to the climate crisis. The application of non-financial factors of environmental, social and governance investments by mining corporates is decisive, however, without legally binding frameworks, the investments tend to be tick box exercises.
Without proper monitoring systems, financial leakages are set to increase in the mining sector. A report by UNCTAD’s Economic Development in Africa Report published in 2020 indicates that an estimated US$88,6 billion equivalent to 3,7% of Africa’s gross domestic product is lost through illicit financial flows. The bulk of the financial leakages occur in the mining sector. Hence, it is necessary to plug corruption and improve transparency and accountability to curb the losses.
The transition cannot be just without putting women and young people at the core of the transition. Women in mining communities bear the brunt of unpaid care work and the effects of unsustainable mining. The situation is even more harrowing for young people who are affected by the lack of opportunities and economic inequality. Thus, a human-centred approach must be at the core of the transition taking into cognisance groups that are already disadvantaged.
Economic, physical and regulatory stranding of assets will remain topical as the energy transition will result in assets such as coal and gas being ditched, while the world seeks to reduce global warming.
Africa needs to strategise on the disposal of stranded assets and to prevent further loss and damage emanating from the transition, while creating more green jobs and skilling and re-skilling human capital for a sustainable economy.
Citizens must inculcate in themselves a culture of participation in economic governance issues especially in national policy planning that sets precedence for economic activities and push for the adoption of non-obligatory yet comprehensive frameworks such as the Extracture Industries Transparency Initiative for transparent mineral resource governance. Ensuring that contractual agreements between governments and corporates are disclosed, citizens will be able to monitor and hold their institutions and governments to account.