U$65 billion African mining vision project in sight

> Timo Shihepo

Windhoek – Africa is set to launch an institutional framework that will govern the mining sector on the continent.

The African Mining Vision Project, which is expected to be launched in the first half of 2016, is aimed at protecting the mining industry on the continent with the hope that Africans benefit from their vast mineral resources, something the continent has failed to for over a century, The Southern Times has established.

The establishment of an institutional framework comes after the African Heads of States and Governments instructed the ministers responsible for energy and mining to devise a framework to guide how to reduce the dominance of multinational companies in African mining.

About U$65 billion has already been budgeted to set up the institution and its various divisions.

In an exclusive interview, Zimbabwe’s Mines and Mining Development Minister Walter Chidhakwa said the African leaders met some time ago and agreed on basic principal cooperation of African countries in the mining sector.

“What has been our responsibility as the Ministers of Mines over the time has been to find a framework to put in place an institutional capability that is able to then coordinate the implementation and the realisation of the African Mining Vision, which is the glimpse of the African Heads of States of what they perceive where our diamonds must take us as countries.

“That process is going on. At the last meeting of the African Union Mining Indaba, which was co-hosted by Zambia and Zimbabwe, we agreed on an institutional framework which is under the African Union,” he said.

Chidhakwa noted that it was important to look at each mineral and find out which African country has got the capacity to manage a certain mineral.

“If Namibia has comparative advantage over everyone else in respect of diamonds, we all gather around and we could even ask Namibia to set up the facility such as the auctioning of the diamonds, cutting and polishing as well as jewellery making and so forth.

“If Zimbabwe has the capacity to deal in gold then we do the same. For copper we can ask Zambia to do it. For example we can send our small quantity of copper to Zambia to develop it. This can also become the main stay of the Zambian economy,” he explained.

Minister Chidhakwa said these are some of the things that they were looking at, as well as discussing but he said they need to consolidate more and come down to agreeing much more closely so that the efforts begin to bear fruits.

“I don’t think there is a long way to go. I think from the first half of 2016 we should see the launching of such institution, which is an African institution responsible for value addition and beneficiation of our minerals.

“We have agreed on the structure of the institution, we also agreed on various visions, and the responsibilities and functions of the various divisions for instance that will drive issues of beneficiation, issues of value addition, and issues of skills development because all these can’t happen without having institutions of higher learning that are producing geologists, mining engineers etc.”

He said education will be important “because it will also produce environmentalists who will make sure that the environment is protected and also that the locals are benefiting”.

Minister Chidhakwa said there must be a division to look at that.

“When these divisions are given their functions and then become operational they now coordinate the activities of various mining (activities) in Africa in order to implement the vision.”

Funding

The issue of funding has stalled many promising projects in Africa and it’s yet to be seen whether the U$65 billion, budgeted for this project will materialise.

Chidhakwa however is adamant that the African Mining Vision is unique, and will set the tone for future projects in the continent.

“The issue of funding an institution in SADC or anywhere is really a difficult matter. When we went for a discussion in Mozambique of this particular issue, we agreed that if we believe that the mining sectors of our respective countries are critical for the revival and development of our economies.

“Why is not good for us to take money from the same mining sector and put it in institutions that will grow those mining sectors? Instead of waiting for donors to put money in our mining sectors who in turn will dictate the operations?”

He added that: “We should be driven by the aspirations of the African people. We unanimously agreed that we should do the best we can to make sure that this is funded. If we have not been able to fund other institutions of the AU, this particular one we must find a way of funding it.  The budget that we approved was about $65 billion to put various requirements together.”

Diamond mining in SADC

The Southern Times also caught up with various experts at the diamond conference that was hosted by Namibia this past week.

Experts agreed that SADC countries needed to do more to benefit from their own natural resources.

The Managing Director of LLD Diamonds, Kombadayedu Kapwanga said there is no common approach from the Southern African countries because most of their mining operations are determined from outside and this will continue to impact negatively on economic development if it continued.

“The future of mining in Namibia and SADC at large is not bad. It’s just that governments need to work with operators because sometimes our governments are just regulating without knowing what they are regulating. Apart from that, the prices are controlled and destroying us, our governments do not really know what is hitting us from the outside,” he said.

Commenting on the situation in Botswana and Namibia, Professor Roman Grynberg, an economist at the University of Namibia said the two countries have contrasting successes which can be enhanced with a little bit of a push.

“I just came from Botswana three months ago. I don’t know the Namibian situation enough to talk much about it. Clearly Namibia is doing a lot to try to benefit from its raw materials but it’s facing a real uphill battle when it comes to some issues. But Botswana has tried really hard and it had a bit more of success than Namibia as the costs are a bit more favourable,” he said.

On the other hand, Grynberg said Namibia has however done more in terms of jewellery development than Botswana.

“It’s very impressive from what I have seen in terms of jewellery. But all these things take time. Say Botswana has been independent for almost half a century and Namibia hasn’t been independent for that long but what you have done in 25 years in terms of beneficiating your diamonds and jewellery, it’s really remarkable but it doesn’t mean it’s sustainable,” he warned.

Minister Chidhakwa on his part noted that the first thing that comes apparent when one looks at the diamond mining companies either in Namibia, Zimbabwe, Botswana or South Africa is that none of them acknowledges that they are making money.

“If you look at the diamond line where you have the miners, the dealers, the manufacturers and the retailers everybody is saying they are not making money. The question I asked is that who is making money? Because the people of our countries are not satisfied with the amount of money that is coming out of the diamond sector.

“They want the diamond sector to contribute much more. So if the Governments are not making money, the miners are not making money, the dealers, the manufacturers and the retailers are not making money, I ask the question, why are we here (at the conference)?

“Why are we running companies that are making losses? It does not make sense. I expressed my concerns in respect to say that information that you always get from the diamond industry is distorted and you have to make a lot of effort unlike some other commodities such as gold, platinum, zinc etc,” he said.

Synthetic diamonds

Chidhakwa also said that it’s high time that Africa protects its natural diamonds from the artificial ones as they are just there to disrupt the “God’s given natural diamonds”.

He said during the diamond conference in Angola the issue of synthetic diamonds was not really discussed but at the conference in Namibia, he said the problem of synthetic diamonds really came out strongly and he understood why.

“Because Namibia produces natural God given diamonds and we will not want, so does Zimbabwe, so does Botswana, so does Angola the value of those natural diamonds to be spoiled by unnatural diamonds that are made in the industrial process.

“We have held discussions to tell those that are making those synthetic diamonds to clearly distinguish them from the natural diamonds. I am of the view that we should not wait for them to do that, we should distinguish them from ourselves, the same way we have distinguished the good diamonds from the illicit bloody diamonds,” he said.

Africa produces 65 percent of the world’s diamonds and Chidhakwa said if the synthetic diamonds are allowed to come into the system, the continent will be the big loser.

“We have a responsibility to protect what’s ours. As Africans we need to get together more to talk about these issues and help define our natural diamonds from unnatural diamonds.”

December 2015
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