MZILA MTHENJANE: Africa’s wealth creation and prosperity from mining and mineral development

Africa needs to intensify its efforts towards the achievement of the objectives of the African Agenda 2063, through the Africa Mining Vision.

The agenda and vision foresee an Africa that is prosperous from the contribution of mining and minerals development to the GDP of the entire continent through a journey of industrialisation, energy security and inclusive growth and sustainable development. 

Africa’s natural resources and mineral endowment is indisputable. The continent boasts about 30% of the global critical minerals essential for various industries, including renewable energy, defence and the rapidly growing field of artificial intelligence (AI). In addition, Africa has exceptional resources of renewable energy, particularly hydro, solar and wind, only a fraction of which has been harnessed, but with increasing utilisation.

We are on the verge of a once-in-a-generation mineral and metals investment boom. The global population is approaching 10-billion people, and many parts of the world — including ourselves in Africa — are pursuing net zero emissions by 2050 and beyond. 

For emerging economies there is a narrow window of opportunity to seize now. Fuelled by the megatrends of decarbonisation, digitisation, population growth and rising living standards, demand for the minerals needed to meet these aspirations will increase substantially, and many of these minerals are and will be sourced from Africa. 

With about $100bn in additional capital investment in the resources sector required each year to meet the demand outlook associated with urbanisation and the decarbonisation of the global energy system, sizeable increases to material production and infrastructure are also necessary.

Such growing demand brings an opportunity to benefit communities, countries, regions and investors that are committed to enabling and facilitating the mining and investment activities needed to meet our global needs, such as a skills-to-employment ecosystem that can generate local value addition, benefit national economies and create revenue flows capable of supporting strong economic development. 

However, among these communities, countries and regions we must ensure that we count and include Africa as the first and primary beneficiary of this global opportunity. It can no longer be acceptable that Africa is a source only of extraction of minerals for the benefit of the world, while the continent continues to depend on mere extraction without further development and expansion of its economies.

The adage of “the scramble for Africa” conjures up images of continued scarring of the bosom of Mother Africa and persisting with the legacy of the resource curse. Is it a surprise then that many African leaders have responded with export bans and other restrictions to maximise the national benefits from the wealth beneath the ground?

In essence, it is a call for development and transformation at scale, as envisioned in the Africa Mining Vision and Agenda 2063 — a development approach that is mutually beneficial to Africa and the world in terms of both social and economic upliftment of the continent and enabling the world to transition to a low carbon future.

This mutual benefit will not emerge and happen without leadership, first from Africa, and second from collaborative efforts from leaders around the world. As African leaders today we have an unprecedented opportunity and responsibility in our duty to position mining as a catalyst for the development we want and translate the mineral wealth beneath the surface of the earth into wealth above surface, economic prosperity and social progress, thus establishing a firm pathway to a just transition for the nations of Africa and the world, leaving no-one behind. 

We need to, and we must, recommit to the Africa Mining Vision for “transparent, equitable and optimal exploitation of mineral resources to underpin broad-based sustainable growth and socioeconomic development” — because a prosperous Africa only bodes well for the world.

Africa must take its rightful place among global players, leveraging its globally significant comparative advantages of substantial known endowment and potential resources of green minerals, huge mining inputs market (mining supply chain), immense and diverse renewable energy potential, an unrealised electrification market of over 600-million unconnected citizens, a youthful population and an energy intensive industrialisation potential through equitable resource-based industrialisation as the basis for modernisation and addressing the continent’s development and inequality challenges. 

This year, as SA hosts the G20, we have a unique opportunity to advocate for African interests on the global stage. Within the G20 framework the B20 is dedicated to bringing business perspectives to bear on global issues of concern.

For instance, the B20 Energy Mix & Just Transition Task Force is advancing practical, investable and inclusive solutions to achieving a just and sustainable energy transition. We recognise that energy security, economic competitiveness and climate responsibility must be advanced together — not in isolation. 

Further, Africa has a unique chance to champion a more co-operative approach to global economic governance. With the first G20 at leaders’ level meetings hosted on African soil in November, the continent has a new meeting with history to claim its place as central to global financial reform.

SA’s G20 presidency is a rare opportunity to advance the reshaping of global governance, amplify the African voice and position the Global South as a meaningful partner in international decision-making. 

In collaborating with global nations and leaders there should be clear expectations for and from Africa for access to finance and investment, transparent governance and engagements and exchange of the highest standards of performance and integrity, rather than interactions driven by self-serving speculation and doubt that results only in extraction and extortion.

The realisation of wealth above ground will require African government and leadership to: 

• Focus on creating predictable and reliable regulatory environments to attract and retain investment for mining projects that tend to be multi-decade commitments of significant capital expenditure. 
• Create investment landscapes within which industry can confidently plan and allocate financial and human capital.
• Align fiscal policies with global priorities such as critical minerals, electrification and infrastructure development. 

In return, investors can ensure that:

• They invest for the long term and operate to maintain and grow their societal licence to operate.
• Encourage responsible mining, such that mining is conducted safely, maintaining high standards of health for employees and environmental stewardship and commit to sustainable resource development. 
• Develop a government-investor compliance culture that supports doing what is right and seeking better ways of operating.

Africa is an important part of the mining and resources sector; it has a significant opportunity to play a larger role into the future of the world as well as enabling and realising its own development, from its resource endowment.

The growing importance of mining and processing of green minerals gives Africa an opportunity to maximise the developmental impacts of extraction, as per the African Mining Vision, through the realisation of all the mineral linkages (fiscal, knowledge, spatial, backward, forward) to underpin resource-based industrialisation and equitable development.

• Mthenjane is CEO of the Minerals Council SA. This is an extract from a keynote speech he delivered at the Critical Minerals Symposium in London on June 23 as part of London Climate Action Week. The symposium was hosted by the Payne Institute for Public Policy at the Colorado School of Mines.