Mining Indaba: People, profits and politics

mining

While most people remain optimistic about the mining industry in Africa, the real agenda for mining and development in Africa includes people, profits, and politics.

These are some of the more difficult problems mining-based companies in Africa are facing and have been recognised by Keith Slack who is the Global Program Manager of Oxfam America’s Extractive Industries team. Slack will also be attending the conference this year.

This conference poses an abundance of opportunity to network with some of the top professionals of the industry as well as space for deal-making. While there will be much socialising and bottomless champagne-drinking, an in-depth discussion on the tougher issues which face mining companies in Africa needs to happen.

The key issues African mining is facing at the moment can be categorised into four sections, according to Slack.

Firstly, African countries need to find ways to capture more added-value from the raw minerals they produce and try to use their mineral resources to develop their nations.

“Adding value or “beneficiation” is critical to helping economies grow and move up the economic ladder” says Slack.

The continent cannot afford to rely heavily on the exportation of raw materials solely for their development as this may hinder the economic growth of the continent. There needs to be more value added in the African mining industry which is important for economic building and growth and will help with the problem of unemployment in Africa. By creating opportunities through the mining sector could lead to job creation.

The Politics of Poverty blog site identifies that the African mining industry needs to ensure that there is more retention of profits and minerals for themselves.

A cluster of bad deals and sky-high transfer pricing leads to the poorer African countries being robbed of billions of dollars every year and a loss for the mining sector.

Peter Leon, the Head of the Mining Sector Group at Webber Wenzel says there has been a recession since 2013 in African mining because demands for commodity from the major commodity importers, like China and India, has abated and commodity prices are either stagnant declining or flat.

“The mining industry around the world is in difficult territory and there is a huge pressure on mining companies to cut costs,” says Leon.

Along with this is the problem of resource revenue management and the politics around this issue, according to Slack.

Slack says all transactions with mining companies need to be disclosed to government and there should be a strict compliance with global anti-corruption regulations.

These are some of the tougher and more serious issues that the Mining Indaba Conference of 2014 needs to address in order to push African mining out of the “resource curse”.

Leon says, “In South Africa, if we don’t get our act together mining companies will simply retrench more and the mining industry will decline.”

The mission of the conference is to attract investment in African Mining. Its foundation is based on capitalisation and development of mining interests in Africa. It creates a unique opportunity for international professionals to connect with African mining.

Global mining professionals will gather this year at the Cape Town International Convention Centre for the annual Mining Indaba Conference, which is the largest annual global mining industry conference.

The conference will run from the third till the 6th of February 2014.

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