Monday, November 3, 2008

Africa ’s Mineral Resources Ministers Endorse ECA inspired Mining Vision

ADDIS ABABA, Ethiopia, October 21, 2008

The 1st Ordinary Session of the African Union ( AU) Conference of Ministers Responsible for Mineral Resources Development ended on Friday 17 th October with a tacit endorsement of the draft ” Africa Mining Vision” , which has been drafted by a team of sector experts under the leadership of ECA. The task force included experts from the African Union Commission (AUC), African Development Bank (AfDB), UNCTAD, and UNIDO.

The Conference was attended by 37 African countries and more than 35 Regional Economic Communities (RECs), international organizations and civil society organizations. African ministers of mines also convened a round table discussion with representatives of international and continental mining companies to discuss the Vision, as well as the work that the mining companies are undertaking to promote sustainable development in the sector, and agree on a future compact for change.

The draft ministerial declaration presented at the closing session of the conference approved the idea of a new resource-based industrialization and development strategy for Africa , which is as a key component of the Vision.

Ministers also mandated the AUC , in collaboration with ECA and the AfDB, to help member States in the auditing, review and renegotiation of existing mining agreements;

Furthermore, the declaration tasks the AUC and ECA to now build on the work which has been started by the International Study Group to Review Africa’s Mining Regimes (ISG), to develop templates, guidelines, standards and codes to assist African countries to maximize the benefits of the activity in their mineral sectors.

Finally, Africa’s Ministers Responsible for Mineral Resources Development instructed the African Union Commission to work together with ECA, the African Mining Partnership, and Africa ’s RECs to finalize the Vision by drawing up concrete action plans, which can be presented to their next Conference in Durban 2009.

The 1st Ordinary Session of the African Union ( AU) Conference of Ministers Responsible for Mineral Resources Development was a timely follow-up to the 2007 Big Table on “Managing Africa’s Natural Resources for Growth and Poverty Reduction”, which ECA jointly organized with the AfDB in February 2007.

In parallel with several other notable initiatives, the 2007 Big Table created an important change movement and has been the precursor of important initiatives in this sector such as the Extractive Industries Transparency Initiative (EITI++), the African Legal Support Facility (ALSF), and the International Study Group to Review Africa’s Mining Regimes (ISG), to name a few.

Africa is the world’s top producer of numerous mineral commodities and has the world’s greatest resources of many more. Although a large part of the continent has not been properly surveyed, the resources already discovered are significant. For example, the continent’s share of world reserves of bauxite and uranium are 42 and 38 per cent respectively. The continent also contains dominant reserves of gold (42%), platinum (73%), and diamonds (88%). Reserves of non-ferrous metals such as chromite (44%), manganese (82%), vanadium (95%), and cobalt (55%), are also of world significance. This is a potential that needs to be harnessed to foment growth and development of the continent.

After the decline in the share of global mineral production witnessed during the period 1980-2000, interest on the continent is now growing exponentially. There is an upsurge in investment and activity across the continent, with West Africa being the last frontier. This has been driven by improved confidence about the continent’s political trends and security situation, sustained periods of macro-economic stability and economic growth, improving institutional quality, lower barriers to foreign investment, surging commodity prices, and the greater competition in the African minerals sector due to the entry of new global players such as China, India, Brazil and the Gulf States.

In 2006, Foreign Direct Investment (FDI) inflows to Africa reached a historical high of US$35 billion. Most of this went to the oil, gas and solid minerals sectors. Africa ’s share of the world’s mineral exploration expenditure is also on the rise, reaching 16% of the world average in 2007.