Minerals and Africa’s Development - Africa Mining Vision

230 Pages·2011·4.09 MB·English

Minerals and Africa’s
Development
The International Study Group Report on
Africa’s Mineral Regimes
Economic Commission for Africa African Union

Minerals and Africa’s
Development
The International Study Group Report on
Africa’s Mineral Regimes
Economic Commission for Africa African Union
Ordering information
To order copies of Minerals and Africa’s Development: The International Study
Group Report on Africa’s Mineral Regimes by the Economic Commission for
Africa, please contact:
Publications:
Economic Commission for Africa
P.O. Box 3001
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© United Nations Economic Commission for Africa, 2011
Addis Ababa, Ethiopia
All rights reserved
First printing November 2011
Material in this publication may be freely quoted or reprinted. Acknowledgement is
requested, together with a copy of the publication.
Designed and printed by Publications and Conference Management Section (PCMS),
Economic Commission for Africa.
Cover photo: IC Publications/African Business
iiiiii
Table of Contents
Acronyms ix
Foreword xiii
Acknowledgements xiii
Executive Summary 1
1. Introduction 5
2. Africa’s minerals: history and search for direction 9
Evolution of African mining 11
Mining on the eve of the colonial period 11
The colonial creation of export mining 12
The role of the colonial state in African mining 13
After the Second World War 13
The early post-colonial decades 14
A more liberal space for foreign investment 15
What was needed in the 1990s? 15
Results of reform—mixed at best 17
From past results to renewed approaches 19
3. Global trends 21
Demand for mineral commodities 21
Global distribution of demand 21
Demand conclusions for the future 24
Supply of mineral commodities 26
Global distribution of supply 26
Supply conclusions for the future 29
Exploration and mine development 30
Profiles and control of mining companies 33
iv MINERALS AND AFRICA’S DEVELOPMENT The International Study Group Report on Africa’s Mineral Regimes
Prices and profits 34
Leading global policy initiatives 36
The China story 36
Old hands: The United States, EU and Japan 38
India 40
Latin America 42
Policy implications 43
4. Mining in Africa: managing the impacts 45
The environmental and social impacts of mining 46
The environmental impacts 46
The social impacts 49
Regulating the environmental and social impacts of mining 50
Protected areas 50
Environmental and social impact assessments 52
Public participation 54
Access to information 57
Addressing the minerals and conflicts link 58
Mining and human rights 59
Mining and employment 61
Resource productivity 63
Policy implications 64
5. Artisanal and Small-Scale Mining in Africa 67
Definition 67
The global position 68
Profile in Africa 68
Challenges in Africa 70
Policy challenges 70
Technical capacity and access to appropriate technology 70
Lack of financing 71
Inadequate access to exploration and mining areas 72
Difficulties in accessing markets 72
Conflict minerals 72
Women’s and child labour issues 74
Self-reinforcing nature of challenges 75
Addressing the challenges: Some country initiatives 75
Policy implications 79
Table of Contents v
6. Corporate Social responsibility initiatives 81
Evolution of CSR as a tenet of sustainable development 82
Intergovernmental processes and frameworks 82
Other initiatives and frameworks 84
Government legislation 85
Promoting social and community development 85
CSR and development effectiveness 87
Policy implications 88
7. Capture, Management and Sharing
of Mineral Revenue 91
Capturing revenue 91
Overview 91
Mineral revenue and tax instruments 92
Tax stabilization 95
Optimizing mineral revenue and linkages through price discovery 95
Managing revenue 96
Revenue impacts 96
Revenue transparency 97
Sharing revenue among local communities 98
Policy implications 99
8. Optimizing Mineral-based Linkages 101
Conceptualizing and quantifying mineral-based linkages 102
Types of linkages 102
Quantifying mineral sector impacts 107
Changing perspectives on mineral-based linkages in Africa 107
Constraints to developing linkages continent-wide 108
Poor resource infrastructure 109
Constraints to trade 109
Inhibitors to downstream value addition 110
Impediments to securing upstream inputs 110
Human resource deficiencies 110
Spatial linkages 111
Policy implications 112
9. International Trade and Investment Issues 115
The context 116
Tariffs 116
Non-tariff barriers 118
vi MINERALS AND AFRICA’S DEVELOPMENT The International Study Group Report on Africa’s Mineral Regimes
Export taxes 119
Foreign investment regulation and domestic policy space 121
Performance requirements 122
Performance requirements and BITs 123
Performance requirements in EPAs 125
Expropriation provisions 126
Investor–state dispute settlement 126
Policy implications 127
10. Mineral Management: The Power of Institutions 129
Rethinking the role of institutions to meet development objectives 129
Institutions promoting mineral-based linkages 130
Traditional institutional roles in mining 133
Negotiating contracts 134
Regulating government discretion in awarding mineral rights 136
Other governance challenges 137
Policy implications 138
11. Regional and Sub-regional Strategies in
Mineral Policy Harmonization 141
The integration landscape in Africa 142
Moves to harmonize sub-regional mineral policies 146
Southern African Development Community 146
Economic Community of West African States 146
West African Economic and Monetary Union 147
East African Community 148
Mano River Union 148
Lessons and policy options 148
12. Looking ahead: Key Challenges and
Policy Messages 151
Africa’s mining legacy and the search for a new development approach 151
Optimizing mineral linkages needs a conscious policy approach 151
The global mining industry: opportunities still exist 152
Boosting the contribution from artisanal and small-scale mining 152
Preventing and managing mining impacts 153
Strengthening corporate social responsibility 153
Improving governance 153
Paying attention to implications of international trade and investment regimes 154
Harnessing the benefits of regional cooperation and integration 154
Final words 154
Table of Contents vii
References 155
Appendices 169
Appendix A: Members of ISG and principal contributors 169
Appendix B :Summary report on the Big Table meeting, 2007 171
Appendix C: Terms of reference of the ISG 177
Appendix D: Extracts from the Lagos Plan of Action for the Economic
Development of Africa (1980 -2000) 182
Appendix E: Main mineral deposits of Africa 184
Appendix F: U.S. Mineral Materials Ranked by Net Import Reliance - 2010 186
Appendix G: State/private control of mining of selected minerals 1975-2006 188
Appendix H: State/private control of refining of selected minerals 1975-2006 189
Appendix I: Environmental and Social issues in mining regimes in selected
African countries 191
Appendix J: Canadian Roundtable Process on CSR and the Canadian Extractive
Industries in Developing Countries 204
Appendix K: Extracts from YAOUNDE VISION 206