The annual African Mining Indaba is the world’s largest gathering of mining professionals. This year it brought 7500 investors, corporates, government officials, advocates and academics to Cape Town’s International Convention Centre for four days of discussion about the state of Africa’s mining sector.
Photo caption: Attendees at the African Mining Indaba. Photo credit: World Gold Council.
While the customary deal-making happened on the sidelines, the walls of the conference halls resounded with some hard truths.
In a keynote address to the Indaba, South African activist and business leader Dr Mamphela Ramphele, told delegates that the benefits of mineral resources are simply not reaching the majority of the continent’s citizens.
Instead, they’re watching mining revenues vanishing into their national treasuries and waiting for development outcomes that don’t materialize. In South Africa, their discontent is exploding in wildcat labor strikes across the platinum belt. The country’s current challenges are a microcosm of a broader continental crisis that is showing no sign of resolution.
The issues are complex, but there is a common thread running through them: a deep distrust between stakeholders involved in the extraction and management of mineral resources, the labor forces working the mines, communities living in the environs of these mines, and the broader population.
The secrecy entrenched throughout the minerals supply chain is breeding a level of suspicion amongst stakeholders that is destabilizing the mining sector.
We know well the negative socio-political impact that mineral reserves can present to a region. In Africa, mineral revenues have, in the past, financed cycles of civil wars and left collapsed states with populations living in extreme poverty. Millions of displaced people in refugee camps, child soldiers kept from classrooms and forced to kill as no child ever should, generations of women subjected to the worst sexual violence under the brutality of militias desperate to hold onto gold fields and diamond pans.
It’s the most extraordinary paradox. States sitting on massive riches and profits exchanged between a few powerful hands while surrounding communities are barely able to feed themselves.
Some are speculating that an African Spring is near. Citizen anger at corrupt and secretive resource governance could very well trigger it. It’s essential that every African government and every company operating within African borders recognize this and acknowledge that responsible and transparent mineral extraction and revenue management offer a genuinely feasible solution.
The costs involved in transforming opaque management and reporting practices are miniscule compared to the alternatives: escalating labor strikes, operational shut-downs, investment withdrawal and crashing share prices.
This solution demands public disclosure by governments and mining companies of their fiscal audits, contracts and licenses. It demands mandatory reporting regulations governing the world’s major stock exchanges through legal instruments that require listed multi-national companies to publish their payments to foreign governments on a country- and project-specific basis, and commitment by major financial centers to harmonize disclosure rules in a way that ensures a transparent and accountable global mining sector.
It’s a solution that helps stabilize investment environments and builds more efficient public-private partnerships that are able to maintain high profit margins while enabling citizens to perform a much-needed oversight function.
It’s also at the heart of the Africa Mining Vision. Endorsed by the African Union as a roadmap to harness the continent’s mineral revenues for more sustainable human development, this vision’s realization hinges on action to institutionalize open and accountable mineral revenue management in every AU member state. Its success requires trust between governments, companies and civil society. This adds an even stronger urgency to Dr Ramphele’s message. The only antidote to the hostility and suspicion of actors with competing interests is more transparency in the way they seek to satisfy those interests.