Andrea Shaw and Daniel Limpitlaw discuss mining.
Mining consultant Daniel Limpitlaw says the extractive industries on the continent have become something of a good news story of late “because of the ability to bootstrap a number of economies in ways that were unimaginable 10 years ago”.
He was speaking at the Africa Business Conference in Sandton where he and mining governance expert Andrea Shaw shared their experiences of working in many of the countries reaping the benefits of their mineral riches. “Mining across the continent is enjoying a renaissance it hasn’t seen since probably the late 1960s,” said Limpitlaw.
“As with everything, it’s important to keep a balance: there are still some problems that face mining in Africa, including civil unrest, and droughts in the Sahel region that make it difficult to establish major mines because of the shortage of water. And we all know the impact strikes in our own country have had on production.
“Across the board, weak infrastructure limits our ability to realise the potential of many mining projects. That primarily expresses itself in electricity, but also in road and rail transport that can be more capital intensive than the mine itself.”
Limpitlaw shared his experiences in consulting to mining companies in countries such as Namibia, Cameroon, the Republic of Congo, the Central African Republic and Rwanda, with his keypoint being that what applies in one country almost certainly does not work in another. This related not only to mining policy and regulations, but also to the effectiveness of local authorities.
“When we were looking at Rwanda, initially it looked like a place that would really not fly. If you looked at the local infrastructure and the level of skills available, all of it was wrong, but they had two things in place that were right.
“One, they had great ore deposits, but the other thing they had was good government policy that was geared to promoting mining activity. In short order they resuscitated this moribund industry and have done very well,” he said. Shaw focused her presentation on the regulatory environment, asking whether the environment exists across Africa to allow the “sleeping giant” to make a difference to how work is done in the mining industry.
She said this would be dependent on the right combination of rules and regulations, skills and behaviour and institutional and organisational arrangements.
“Across Africa there has been a lot of time on the formal rules and systems, but virtually no attention to the institutional and organisational arrangements that will allow these systems to work fairly,” she said. This has eroded certainty over issues such as who actually owns the licence and promoted corruption in the issuing of licences.
Bettering industry
“The time is not for more rules, regulations and planning; the time is for implementation. Across the industry what we need now are that the bureaucratic systems actually contribute to a better industry,” she said.
“The really big challenge in Africa is a suitable platform for having informed and constructive dialogue between the industry, civil society and government. At the moment, and South Africa is a very good example of that but it is certainly my experience in Africa as well, there is a lot of trench-digging going on.
“People are shouting at each other and nobody is really listening to the other side. We need to move it out of what I think is quite an arid debate of whether mining is good or bad. We have to start talking about how we create an industry that is pro-poor, that is sustainable and of economies that create jobs.”
There was a general feeling that the industry was moving in the right direction and becoming more inclusive of the communities they operate in, yet much more remains to be done.