The future of mining in Africa

Heading to my first African Mining Indaba in Cape Town, South Africa recently, I was wondering how receptive mining companies would be to the idea of greater partnership given that commodity prices were at historic lows. While there was some hesitation from isolated voices, the overwhelming consensus was, YES, partnerships that promote shared benefits are critical to the sector in both the good times and the bad.
The key in this commodities downturn is to develop win-win partnerships. A central theme at Indaba was the importance of hiring and training local people, and increasing the focus on local procurement which, in turn, helps diversify local economies through linkages to mines’ supply chains. Best practices in training for small and medium-sized enterprises in health, safety, environmental and quality standards were highlighted as well as initiatives to ensure women share in the benefits flowing from mining evenly.

Collaboration is also key to ensuring that the power generated for mining in Africa benefits communities. Power-mining integration is essential when you consider that Sub-Saharan Africa today only generates 80 gigawatts of power each year for 48 countries and a population of 1.1 billion people. Two-thirds of people in the region live entirely without electricity and those with a power connection suffer constant disruptions in supply. Without new investment and with current rates of population growth, there will be more Africans without power by 2030 than there are now.

A World Bank study we launched at Indaba – entitled “The Power of the Mine” – shows how mining companies can play a key role in harnessing Africa’s abundant clean sources of energy to overcome this lack of electricity. The study calls on the mining industry to work more closely with electricity utilities in the region to meet their growing energy demands. Rather than supplying their own energy on site, mines can become major and reliable customers for electricity utilities or independent power producers (IPPs) which can then grow and develop better infrastructure to bring low-cost power to communities.

As part of the study’s launch, The World Bank Group hosted a panel discussion that included the Ministers of Mining and Natural Resources of both Ghana and Guinea, as well as the CEO of Randgold mining company, the Director of Zambia’s energy utility ZESCO, along with other private sector representatives. Each speaker highlighted the enormous potential of these partnerships in their countries or operations and the need for collaboration among several parties to make it work. You can see a recording of the panel discussion here.

A third area of collaboration highlighted at the conference was managing the spread of disease. A number of mining companies in Africa have played a critical role in areas impacted by the Ebola pandemic. The World Bank hosted a panel discussion on the role of the mining industry in managing the spread of disease. High level government representatives and leaders of mining companies in the region discussed the boundaries between the responsibilities of the private sector and Government for the health of the community. The panel concluded that while the fundamental responsibility of public health lies with the Government, mining companies have a self interest in promoting healthy miners and healthy communities that they live in.

While the downturn of the commodities industry was apparent at Indaba, discussions at the conference reinvigorated commitment to long-term partnerships between stakeholders in the industry to promote sustainable development. This commitment is key to the World Bank´s goals, especially in Africa where 30% of the world´s estimated mineral reserves are held. Working together we can make sure that this growth translates into shared prosperity.
To read more about my thoughts on areas for potential partnership on mining in Africa to further sustainable development in the region, you can read my keynote speech from Mining Indaba 2015.

This article is published in collaboration with The World Bank’s Voices Blog. Publication does not imply endorsement of views by the World Economic Forum.

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Author: Anita Marangoly George is Senior Director of the World Bank Group’s Global Practice on Energy and Extractive Industries. 

Image: An aerial view shows pools of mineral-coloured water gathered on salt flats in holes dug by salt collectors on the Senegalese coastline. REUTERS/Finbarr O’Reilly.