April 2017
African Minerals Development Centre
AFRICA MINING VISION
Africa Mining Vision Updates The past few months have seen some important milestones for the Africa Mining Vision (AMV). These include breaking new ground at the Mining Indaba, AMV Compact, major strides in AMDC’s Geological and Minerals Information System (GMIS) and significant AMV progress in a number of member states. UPCOMING EVENTS
Marine Mineral Resources Workshop 2 to 4 May 2017 Kampala, Uganda
Regional Workshop 2 on Transfer Pricing in Minerals Sector 8 to 12 May 2017 Dakar, Senegal
Regional Workshop on Building Capacity for Environmental Sustainability and Small Scale Mining 24 to 26 May 2017 Addis Ababa, Ethiopia
Mining Indaba: Tackling illicit financial flows – can Africa rise to the challenge? Mining Indaba: Linkages, investment and diversification in African mining: Ghana under the spotlight Mining Indaba: Africa Mining Vision Compact initiative gaining traction one year on African tax authorities equipped with tools to deal with transfer pricing issues AMDC and TJN-A host dialogue on Africa's response to the commodity crisis Africa Mining Vision plays a critical role in region's development trajectory Stakeholders see mining as a key socio-economic development enabler Mozambique calls for a people-centered and planetsensitive mining policy Kenya ramps up its Country Mining Vision process AMDC and Ghana move forward on developing a mineral sector supplier development programme Global marine mineral experts to meet in Uganda African Minerals Geoscience Centre (AMGC) destined to beaa Pan-African Centre of Excellence Congo strengthens mining contracts for development Capacity-building training in extractives in Equatorial Guinea International Seabed Authority grants observer status to AMDC 1
African Minerals Development Centre
April 2017
AMDC in Mining Indaba Tackling illicit financial flows – can Africa rise to the challenge? At this year’s Africa Mining Vision day on 5 February 2017, some of Africa’s most influential mining industry leaders and government counterparts debated strategies to counter Illicit Financial Flows (IFFs) from the mining sector in order to boost domestic resource mobilization. Held on the margins of Mining Indaba, the Africa Mining Vision Day session consisted of a number of activities, including a panel that examined gaps in the design and implementation of key instruments used in mineral-rich countries to mobilize domestic revenues. “As such mobilization grows ever more important for Africa’s long-term development, curbing IFFs becomes an increasingly urgent issue,” noted the session. Estimates by the United Nations Economic Commission for Africa (ECA) show that, between 2000 and 2010, more than half (56.2%) of the IFFs from Africa came from the extractive sector. The event was attended by South African President Thabo Mbeki. The session, which was a feature of Mining Indaba’s annual Africa Mining Vision Day/Ministerial Symposium, was hosted by the African Minerals Development Centre (AMDC). AMDC has also recently published a major report on new approaches to tackling IFFs as a follow-up to the AUC/ECA High Level Panel on IFFs, led by former President Mbeki. Giving a Pan-African perspective, African Union Commissioner for Trade and Industry, Fatima Haram Acyl, said, “An effective mineral-led industrialization strategy will therefore require new ways of looking at Africa’s rich minerals and metals endowment.” Panel members underscored that achieving the transformative potential of Africa’s resources requires a new way of thinking about minerals which aligns with the continent’s owned priorities of industrialization and diversification through value addition, processing, beneficiation and the creation of strong mineral led linkages with other sectors of our economies. 2
African Minerals Development Centre
April 2017
AMDC in Mining Indaba Linkages, investment and diversification in African mining: Ghana under the spotlight Indaba delegates were offered a sneak preview of some ground-breaking work in Ghana, designed to unpack new approaches to linkages, investment and diversification in the country’s minerals sector during the Linkages Panel Session on 8 February 2017. The Mining Indaba Special Information Session on 8 February 2016 shared findings from a new economic assessment on linkages and domestic procurement in Ghana. The event was conducted jointly by the African Minerals Development Centre (AMDC) and the German Federal Institute for Geosciences and Natural Resources (BGR). Ghana invited the study following its recognition of the need for upstream domestic supply linkages, diversification of the country’s economic structure, stronger involvement of the local business sector, and enhancement of its human resource and technological capabilities to create sustainable value from its mineral resources. Kojo Busia, moderator of the panel session and Acting Coordinator of AMDC, explained that this work with Ghana will help in onboarding the Africa Mining Vision (AMV) through a country-specific mining vision, saying “The Country Mining Vision is where the ‘rubber meets the road’ in implementing the AMV. Ghana is a relatively mature mining country and there is an opportunity for the country to optimize and add value. And this transformation requires examining this from a regional dimension.” Using Ghana’s experience as a springboard, the AMDC-hosted session also brought together key experts to examine the African mineral sector’s potential for deepening linkages, promote investment and pursue diversification to contribute to broader economic transformation. The session, which is in partnership with BGR, focused on concrete opportunities in value creation within upstream linkages in the mining sector in Africa. Johannes Danz, program officer of extractives and development at BGR, noted that the concept of producing locally needs to go beyond locally registered firms, and should involve local production and value addition. Big-ticket items should be the focus of local procurement. 3
African Minerals Development Centre
April 2017
AMDC in Mining Indaba Africa Mining Vision Compact initiative gaining traction one year on A policy dialogue at the 2017 Mining Indaba heard strong endorsements from public and private sector speakers for the Africa Mining Vision (AMV) Private Sector Compact. The AMV Compact was launched at last year’s Mining Indaba, where it won early support from the Mining Industry Association of Southern Africa (MIASA). The Compact is designed to close existing gaps between mining communities, the private sector and governments. It consists of a set of twelve principles designed to offer improved value and benefits to all parties involved. Governments and mining companies are encouraged to sign up to the Compact for themselves, using one of a number of flexible governance options. The Indaba special session was set up to facilitate an open dialogue, guided by Compact principles, between governments and the private sector to explore areas of consensus and possible win-wins. All the 54 African Union member countries have adopted the African Mining Vision in order to ensure that mining activities contribute to economic transformation and benefit all African citizens. However, successful implementation hinges on buy-in from the private sector and other key stakeholders in Africa, at both regional and country levels. Former President Thabo Mbeki, guest of honor of the special session, said: “The Vision is important to the continent and we need a realization for this vision.� The AMV Private Compact encourages cooperation by leveraging the business benefits that the private sector will derive from AMV implementation at national and regional level. It primarily targets mining companies including oil and gas, Chambers of Mines and other mining associations. 4
African Minerals Development Centre
April 2017
Tax authorities equipped with tools to deal with transfer pricing issues The African Minerals Development Centre (AMDC) together with the Minerals and Energy for Development Alliance (MEfDA) and the World Bank, delivered the first of two regional workshops on transfer pricing in Africa’s mineral sector. The first workshop was successfully held from 13-16 March 2017, and included senior decision makers from tax administration authorities, revenue agencies, and ministries of finance and mines. Charles Akong of AMDC noted that, “Transfer mispricing represents one of the key issues which contribute to African countries missing out on the full benefits of their minerals”. Indeed, ensuring that transactions between multinational mining companies and their affiliates are conducted as independent entities through applying the arm’s length principle remains a key challenge facing tax administration authorities across the continent.
As part of follow up activities to implement the recommendations of the landmark African Union High Level Panel on Illicit Financial Flows, which was led by President Thabo Mbeki of South Africa, participants were equipped with critical knowledge of the complexity of transfer pricing issues and illicit flows that occur along the mineral value chain and through global mineral production and trade. The workshop focused on skills to assess, prioritize and audit risks associated with transfer pricing. Participants also examined proactive measures to protect tax bases from being eroded and undermined by tax avoidance and illicit profit shifting practices by mining companies. Both workshops have been placed within the context of AMDC’s support to countries to implement the Africa Mining Vision, the continental framework to reform and transform the sector to ensure greater mobilization of domestic revenues along the entire value chain. AMV aims to create a ‘transparent, equitable and optimal exploitation of mineral resources to underpin broad-based sustainable growth and socio-economic development’. In accordance with the forward-looking framework, AMDC works to support governments to strengthen their fiscal governance in ways that curb illicit financial outflows from the sector. 5
April 2017
African Minerals Development Centre
AMDC and TJN-A host dialogue on Africa's response to the commodity crisis
Africa Mining Vision plays a critical role in region's development trajectory
The African Mineral Development Centre (AMDC), in collaboration with the Tax Justice Network – Africa (TJNA), convened an all-day session of experts, member States and other stakeholders to discuss the impact of the fall in commodity prices on Africa and policy responses that countries can consider adopting.
Participants of the Second Africa Oil Governance Summit unanimously recognized that the African Mining Vision could facilitate Africa’s accelerated development through value linkages and regional integration.
These focused on actions under the auspices of the Africa Mining Vision (AMV) that countries can consider which will add value to minerals and use mining to drive greater socioeconomic development, in order to lessen vulnerability to raw commodity price fluctuations. The colloquium was attended by representatives of seven African countries, three non-African countries and a large variety of think tanks and civil society organizations. It was emphasized that failure to diversify has left African economies as commoditydependent as in the past. Indeed, as noted by Kojo Busia, Acting Coordinator of AMDC, “The era of low commodity prices invites sober reflection.” Biniam Behre of the Permanent Mission of the State of Eritrea added that, “African countries were not making the most of their minerals during boom years.” The AMV highlights the importance of policies to promote inclusive, productive industrialization based on mineral endowments, and African states have been adopting these through Country Mining Visions (CMVs) with the assistance of AMDC. The experts and member State representatives noted that Africa has a huge potential to industrialize based on mineral endowments, but that this potential has not been met. Greater linkages with manufacturing, agriculture, and regional cooperation through value chains is necessary to capitalize on this but as of yet has not been a policy priority.
The annual Summit was a gathering of key players of Africa’s oil industry and it served as platform to engage around the governance of the oil and gas resources to transition oilproducing countries onto an accelerated development trajectory that takes advantage of the continent’s position as the last oil frontier of the world. Attended by participants from government ministries, industry regulation agencies, accountability institutions, oil and gas companies, civil society organizations, and other key organizations, this year’s gathering discussed the effects of oil price shocks on the economies of African countries. They also pondered on how failure to take appropriate actions and measures to address the negative effects of oil price shocks could have adverse implications for the provision of social and economic infrastructure and services to the region. Isabelle Ramdoo, Senior Linkages Investment Advisor of AMDC, said,
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“The participants are all aware that the state of oil resource governance in Africa is still underdeveloped and could further compound the development challenges and all of them agreed that the Africa Mining Vision can accelerate the region’s development, notably through value linkages and regional integration.” For the full list of recommendations from the Second Africa Oil Governance Summit, please see the communique.
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African Minerals Development Centre
April 2017
Stakeholders see mining as a key socio-economic development enabler The Africa Mining Summit opened in Dar es Salaam on 13 December 2016 to bring together governments and the private sector to discuss challenges and opportunities in the extractive industry. In her keynote address, H.E. Fatima Haram Acyl, Commissioner of Trade and Industry of the African Union Commission, said, “There are two things that unite us in this region—the growing young population and abundant resources. This is an issue of paradox, we have these rich resources in Africa and we need to translate these into wealth and assets for the people. We must rewrite the narrative, work on the paradigm shift that will translate into job creation and social transformation.”
Attended by key stakeholders of the mining industry ranging from investors to governments and private companies, the two-day summit was capped by a Ministerial Summit where ministers of African member states had the platform to stage a robust discussion of the Africa Mining Vision (AMV). As recalled during the discussion, the AMV was formally adopted by African heads of state in 2009 and it is the continent’s own response to tackling the paradox of great mineral wealth existing sideby-side with pervasive poverty. AMV also outlines a unique roadmap to the transparent, equitable and optimal exploitation of mineral resources to underpin broad-based sustainable growth and socioeconomic development in Africa. The Africa Mining Summit offered an opportunity for AMDC representatives to update member states on AMV initiatives and to showcase and discuss two major developments: the AMV Compact and the Geological and Minerals Information System (GMIS) Strategy. AMDC has collaborated with a wide range of partners to develop the GMIS Strategy, which is the first strategy to be inspired by the AMV. It aims to strengthen African countries’ capacity to produce and co-ordinate geological and mineral information. 7
African Minerals Development Centre
April 2017
Mozambique calls for a people-centered and planet-sensitive mining policy The Government of Mozambique and the United Nations (UN) rolled out the implementation plan of the Policy and Strategy for Mineral Resources on 21 March 2017 that brought together participants from ministries and other government institutions, the UN including the African Minerals Development Centre (AMDC), civil society, media, private sector, academia, and other partners. Mozambique’s mining policy and strategy was designed to strategically adjust to today’s dynamic and growing activity of the mineral sector in the country, as well as to closely align with the tenets of the AMV, which calls for transparent, equitable and optimal exploitation of mineral resources to underpin broad-based sustainable growth and socio-economic development. Mozambique, alongside other African Union Member States, adopted the AMV in 2009. AMDC, currently based at the United Nations Economic Commission for Africa, is the lead institution fast tracking the AMV. Together with key partners, AMDC has been supporting Mozambique's mining reform process starting with the Responsible Mineral Development Initiative (RMDI) roundtable on the future of the extractive industries sector in 2013. The said event kick started the multistakeholder dialogue among government, industry and civil society, and identified the key challenges, opportunities and potential actions required for responsible mineral development in Mozambique. It was noted during the discussions that coordination, collaboration and communication across government agencies and multiple stakeholder groups would be key to creating consensus, buy-in and accountability to a shared vision of success. The meeting agreed to establish a permanent forum for multistakeholder dialogue as well as improve strategic communications and outreach. Kojo Busia, acting coordinator of AMDC said, “Stakeholder engagement process is one of the key pillars of the Country Mining Vision. This allows strengthened capacities, ownership, and access to information and knowledge to make informed decisions.” It is in this context that the Implementation Plan of the Mineral Policy and Strategy was developed to support the operationalization of the outcomes of the RMDI discussions. The implementation plan would act as the road map of the policy—identifying gaps, validating information and data as well as detailing the priorities and landmarks. It will detail the set of action points as well as map out the outline of activities that will point the way to the ultimate direction— having tangible and measurable results on the ground and buy-in from the people. 8
African Minerals Development Centre
Capacity QUOTE Kojo Busia, AMDC acting coordinator “At the country level, the implementation of the Country Mining Vision provides an opportunity to domesticate the AMV. As an institutional process, the Country Mining Vision facilitates the emergence of much needed ‘policy space’ for a different kind of conversation with all stakeholders including mining companies for a ‘new social contract.’ The CMV process supports countries to develop their mining sector in ways that are ‘’responsive to geopolitics, political economy of extractives and of change, societal pressures, market dynamics, business fundamentals and the concerns of today and tomorrow.’’
April 2017
Country Mining Vision Kenya ramps up its Country Mining Vision process In May 2016, Kenya passed its first new mining law in more than 70 years, strongly based on the Africa Mining Vision. In October 2016, leaders from government ministries and a wide range of stakeholders met in Nairobi to kick-start the process of developing Kenya’s Country Mining Vision for Kenya (CMV). The aim of the CMV is to help Kenya pave the way for a mineral-led structural transformation by improving inter-sectoral coordination and governance, sequencing interventions and investments better, and building a broad coalition for change. The Ministry of Mines and other major players pledged to continue rolling out the process by creating a clear road map and continuing support and coordination among the key stakeholders.
AMDC and Ghana move forward to developing a mineral sector supplier development programme AMDC met with senior Ghanaian government officials and business leaders in order to establish a supplier development programme linked with Ghana’s mineral sector in the context of a Country Mining Vision (CMV). The meetings provided an opportunity for AMDC to present its vision for building upstream supply linkages and mineral-based economic clusters in Ghana and across West Africa, which hold the potential to spur job creation and industrialization, and to gain buy-in at the highest level of governance. During this joint mission in Ghana, AMDC and BGR met senior government officials and key private sector leaders, and this was an important step in sharing research on value-addition possibilities and reaching a consensus on the need for deepening this study and gaining direct support from the Government of Ghana, which will culminate in the establishment of a Suppliers Development Programme (SDP). 9
African Minerals Development Centre
PROFILE Meet AMDC Experts
April 2017
Global marine mineral experts to meet in Uganda Global experts in seabed mining are gathering together in Kampala, Uganda from May 2 to 4 to discuss the potentials of marine resources in advancing the continental and global agenda in socioeconomic development. The experts composed of widely-respected scientists, researchers, academics, and government officials will be tackling challenges and opportunities on marine mineral resources development, and the protection and preservation of the marine environment from activities in the international seabed area.
Dr. Kaiser Goncalves de Souza Dr. de Souza is the Head of the GMIS workstream of AMDC. He is also in charge of AMDC’s African Blue Economy Unit. Dr. De Souza has more than 30 years of experience in marine and continental mineral resources research, sustainable development, management, policy elaboration, and business development at national and international levels, as well as in the public and private sectors.
This groundbreaking event is a first of its kind as the African Minerals Development Centre (AMDC) gathers key stakeholders and global experts of marine mineral resources together to strategize future partnerships and activities that will harness the resources in the continent’s 20 million square kilometers of maritime areas. Kaiser de Souza, Senior Geology and Mineral Information Expert of AMDC, said, “We now have continental and globally-agreed evelopment goals and mineral resources, on land or under water, are the common heritage of the people in this region, and therefore the harnessing of these resources need to benefit them. And this is the core the Africa Mining Vision, which is a continental blueprint in creating a transparent and optimal use of the region’s mineral resources to facilitate socio-economic development.”
He has carried out professional activities in more than 30 countries in South and Central America, the Pacific region, Europe, Asia and Africa. He received his Ph.D. in Earth Sciences from the University of Paris in France. He also completed a post-doctorate in the field of deep sea geology at the Federal Institute of Geosciences and Natural Resources in Hanover, Germany.
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African Minerals Development Centre
Making African Minerals Geoscience Centre (AMGC) a Pan-African Centre of Excellence At the margins of the Africa Mining Summit in Tanzania on December 2016, delegates had an opportunity to visit and inspect the AMGC, formerly the Southern and Eastern African Minerals Centre, based in the capital city of Tanzania.
April 2017
Congo strengthens mining contracts for development The Government of Congo, through its Ministry of Mines, and AMDC co-hosted a workshop in Brazzaville in December 2016, to launch a project aimed to increase the capacity of the country to negotiate the most optimal mining contracts. The event brought together various Ministries, such as Mines and Geology, Petroleum, Finances, Environment, Justice, and Labour, and representatives from public institutions, geological survey organizations, and civil society. The project is funded by the 9th Tranche of the United Nations Development Account, which supports Member States in designing and implementing strategies and policies towards sustainable, equitable and inclusive development.
Commissioner Acyl and the delegation toured AMGC’s facilities and laboratories, which have the potential to become a regional and continental Centre of Excellence for AMDC’s GMIS work, if the Centre can perform at full capacity. Commissioner Acyl reiterated the commitment of AUC to support AMGC to become a full-fledged African institution to effectively provide services to AU Member States.
With AMDC as the implementing partner, the AMV-based project aims to strengthen the country’s capacity in negotiating and managing its mining contracts to optimize broad-based development effects generated from the revenues of these contracts. The Brazzaville workshop was an initial event, to be followed by a wider series of training sessions in the country.
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African Minerals Development Centre
April 2017
Capacity-building training in extractives in Equatorial Guinea
International Seabed Authority grants observer status to AMDC
The African Mineral Development Centre (AMDC), in collaboration with the United Nations Conference on Trade and Development (UNCTAD), and the Government of Equatorial Guinea, organized a four-day capacity-building training on contract negotiation and the structuring effects of the extractive sector on the economy from 15 to 18 February 2017 in Malabo.
The International Seabed Authority (ISA), the institution working on development-related activities in marine areas, grants observer status to the African Minerals Development Centre (AMDC).
Equatorial Guinea, with its experience in hydrocarbons and as the fourth oil producer in Africa, has a significant mining potential that can fully utilize the Africa Mining Vision (AMV) principles. The event served as a venue to provide local stakeholders with the necessary expertise to develop a robust extractive sector, and to sensitize the relevant public authorities and national experts on the negotiation techniques for the specific mining contracts, strategies to monitor the implementation of these contracts, and the opportunities offered by the multiplication of linkages between the extractive sector and the rest of the economy. Nearly 120 technicians from the Ministry of Mines and Hydrocarbons were trained during this session on various topics including the AMV approach on contracts negotiation and the development of linkages, the strategies which should be used by Governments to encourage the integration of local entrepreneurs along the mineral value chain, the impact of geological information on contracts negotiation, mechanisms to strengthen local content in the extractive sector, cost related to production activities, the issue of the development of related infrastructures in the mining projects context, and the APPA Petroleum Fund.
Established in 1994 upon entry into force of the 1982 United Nations Conventions Law of the Sea, the ISA is an autonomous international organization working on mineral developmentrelated activities in marine areas beyond the limits of national jurisdiction, a geographic area underlying most of the world’s oceans. AMDC’s expertise on the economic potential of the minerals of the ocean floor can benefit the ISBA, and according to Kojo Busia, Acting Coordinator of AMDC and Senior Mineral Sector Governance Advisor, “AMDC views the minerals of the deep ocean floor as a resource of growing economic potential. We believe that the Authority, sponsoring States, contractors and AMDC itself can all benefit from the involvement of AMDC as an official nongovernmental observer with the International Seabed Authority.”
The project coordinator, Claudine Sigam, expressed her optimism about the impact of the Malabo training session, "I am confident that all the lessons learned during this training session will be useful for the efforts undertaken by Equatorial Guinea to diversify its economy.”
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April 2017
African Minerals Development Centre
New AMDC publications Free to download from the AMDC website; read online or download at https://issuu.com/africanmineralsdevelopmentcentre African Minerals Development Centre Corporate Brochure, 2016 Explains the work and impact of AMDC to date, and introduces readers to AMDC’s workstreams. African Minerals Development Centre Workstream Brochures, 2017 Brochure series covering individual AMDC workstreams: Governance and participation; Geological and Mineral Information Systems; Linkages, Investment and Diversification; Human and Institutional Capacities; Impact of Illicit Financial Flows on Domestic Resource Moblization The report adopts a policy-oriented approach, systematically examining risks points of illicit financial leakages along the mineral value chain. The selected countries –Democratic Republic of the Congo, South Africa, Tanzania and Zambia - reflect an inclusive range of policy, institutional and economic realities. They are all mineral-dependent economies, albeit at different stages of economic development and structural transformation. Their experiences reflect the regional diversity of the continent.
Optimizing Domestic Revenue Mobilization and Value Addition of Africa’s Minerals The report examines the management of Africa’s mineral resources, with a particular focus on optimizing revenue mobilization through the harmonization of fiscal regimes, in particular royalties, across the continent.
AMDC in the media AMDC feature, Mining Week: Catalyst for development, David Oliveira, 21 October 2016 This Mining Week feature explores the strategy behind the Africa Mining Vision and AMDC’s progress to date. Mining Week on the AMV Compact: Parties recommit to AMV Compact, Mbeki praises initiative’s aims, Ilan Solomons, 9 February 2017 This Mining Week article reports reactions to the AMV Compact from the 2017 Mining Indaba, and former South African President Thabo Mbeki’s statement that the AMV Compact was “important to the continent and it was crucial that its aims were realised”.
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April 2017
African Minerals Development Centre
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Copyright Š 2016 African Minerals Development Centre. All Rights Reserved. Communications and Advocacy Team African Minerals Development Centre Addis Ababa, Ethiopia eca-amdc@uneca.org
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