Beneficiation takes shape in the region

By Lovemore Ranga Mataire

HARARE – Zimbabwean President Robert Mugabe’s call for Africa to expedite industrialisation through beneficiation of its mineral resources seems to be taking shape in the region with Tanzania recently outlawing the exportation of gold, copper, nickel and silver concentrates.

Beneficiation was Mugabe’s clarion call during his tenure as both the African Union and SADC chairperson.

Mugabe’s call, which was widely embraced at regional and continental levels, seems to be gathering pace as Tanzanian President John Magufuli last week directed his Ministry of Energy and Minerals to issue a ban on ore exports of gold, copper, nickel and silver.

In a statement posted on the Tanzanian government, the Ministry of Energy and Minerals said value addition activities would stimulate employment opportunities, revenues and technology transfer.

“All companies and individuals who were exporting concentrates and mineral ores to foreign countries for beneficiation, including processing, smelting or refining, will immediately stop, and start doing such activities within the country,” read part of the statement issues last Friday.

The ministry said government would provide necessary support to stakeholders in mineral beneficiation within the country, particularly the smelting and refining of minerals.

Major companies which used to export raw minerals include AngloGold Ashanti, Africa’s largest gold miner, and Acacia.

An online South African-based publication, miningweekly.com, this week reported that the Aim-listed Acacia was seeking clarification from the Tanzanian government as the directive would have a huge impact on its revenue, 30 percent of which depended on the exportation of mineral concentrates.

However, the Tanzanian government said the directive was in line with the country’s Mineral Policy of 2009 and the Mining Act of 2010.

As then AU chair, Mugabe consistently and persistently highlighted the need for African countries to industrialise their economies and move away from the continued exportation of their raw materials at very low prices.

The beneficiation of minerals from the Southern African Development Community (SADC) was the focal point of the 34th SADC Summit hosted in Victoria Falls, Zimbabwe, in 2014.

The beneficiation theme is in line with Zimbabwe’s long-term economic strategy. Mugabe, who was the then SADC chairman, told delegates at the 34th SADC that the goal for the regional body is to drive short and long-term economic growth and that this goal could be realised if the region benefited from its minerals.

“Our region has abundant resources, which resources, instead of being sold in raw form, at very low prices, must instead be exploited and beneficiated in order to add value and cost to those products which we eventually export. This process should assist us in our efforts to industrialise and in turn, increase employment opportunities for our people,” Mugabe said then.

Then AU Commission chairperson, Nkosazana Dlamini-Zuma, weighed in saying the only time Africa can realise its potential is when it scales down its exporting of raw materials.

“Exporting raw material resources means exporting the high level jobs we should be creating. Africa is endowed with oil, gas, platinum, gold, diamonds, you name it, but with all that endowment most of African countries lack economic progress and are well behind by development standards,” Dlamini-Zuma said.

Economic analysts believe that beneficiation initiatives ensure the growth of business activities, particularly in the diamond industry where activities like diamond sorting, valuing, cutting, polishing, marketing and retailing must be localised.

In Botswana, the Diamond Trading Company (DTC) is the epitome of beneficiation which has created thousands of skilled jobs through establishment of joint venture operations in Botswana, Namibia and South Africa.

About 3,200 manufacturing jobs have so far been created in Botswana since 2007, and 21 locally-based sightholders have also been established.

Beneficiation has resulted in DTC Botswana being the most advanced diamond sorting and valuing operation in the world.

According to Africa Outlook, an online magazine dealing with economic issues, while most state-owned enterprises can only dream of profitability, the Namibia Diamonds Trading Company (NDTC) has contributed more than R450 million in dividends to national coffers in the past five years.

Its success is born out of the fact that it is a beneficiation company in partnership with De Beers and the Namibian government.

Africa Outlook quoted NDTC head of sales and marketing Brent Eiseb saying; “All in all, the calendar year was cautionary, volatile and challenging for the industry and NDTC mainly due to uncertainty caused by exchange rate volatility, the problems in the Eurozone, slowing demand in China and India, and a general liquidity in international markets. Despite this we have performed well against the beneficiation objectives and returned significant shareholder                                                            value.”

Eiseb said the main objectives of the company was to drive local beneficiation from diamonds by growing and supporting the downstream diamond industry in Namibia, with the broad aim to ensure the maximum, long-term value from Namibian diamonds through world-class sorting, valuing and sales practices in Namibia.

In South Africa, Gauteng Premier David Makhura last year told delegates at a De Beers Consolidated Mines meeting in Johannesburg that beneficiation was the future of SA’s diamond industry.

Makhura said beneficiation is an important sector in the economy given the fact that African mineral resources are mined and exported as raw materials, which are turned into “beautiful things” often unaffordable to buy back.

March 2017
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