S12 ATR February 2022 Mining News_ATR - New Master Template 2016 27/01/2022 07:27 Page 46
MINING | REPORT Gold from the Mwanza Precious Metals Refinery.
Image Credit: Mwanza Precious Metals Refinery Co. Ltd.
Mineral potential being missed African countries need to invest fully in the value addition of their extractive industries to boost income from their minerals. Mwangi Mumero reports. nvesting in value addition and employing newer technologies in the mining industries will reduce the exports of raw mineral ores to richer industrialised nations for further processing. Take Tanzania – the fourth largest gold producer in Africa – for example. The country’s gold production currently stands at roughly 40 tonnes a year and, more generally, it earned around US$2.3bn in minerals exports in 2019, a significant increase over the 2018 level of US$1.6bn. Gold is Tanzania’s biggest foreign exchange earner, overtaking tourism in 2020 and new, larger, deposits are still being discovered in the Geita region. By 2020, two model gold smelters have been built to boost mineral processing and in June 2021 the Mwanza Precious Metals Refinery was inaugurated. The construction
Image Credit: Mwanza Precious Metals Refinery Co. Ltd.
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of a 24.5 km wall around the Mirerani tanzanite mine is expected to help curb smuggling – an activity that results in a sizeable amount of minerals lost each year. “Smuggling networks involve influential persons working with foreigners to sneak gold and other minerals through Kenya, Tanzania and India,” observed Luckystar Miyandazi, a Tanzanian tax specialist and mining sector researcher. Yet, despite these recent developments and the importance of minerals to the country, the area remains under-developed with little investments in value-addition infrastructure as well as other socialeconomic indicators. In seeking out foreign investors in value added activities in the country, the Government of Tanzania notes that opportunities exist in smelting and processing of
The Mwanza Precious Metals Refinery in Tanzania was inaugurated on 13 June 2021.
AFRICAN REVIEW OF BUSINESS AND TECHNOLOGY | FEBRUARY 2022
minerals. Imported machinery and supplies can be brought into the country duty free and the Government is also calling for investments in technology, machinery and services in mineral value addition.
Substantial mineral potential Africa has about 42% of the world’s gold reserves and 80-90% of chromium and platinum group metals. In 2019, minerals and fossil fuels accounted for more than a third of exports from at least 60% of African countries. However, multinational firms mainly from Europe, North American and China still dominate the extraction and refining of most minerals in the continent – with minor roles given to local firms. Two nations in Africa – Botswana and South Africa – have invested heavily in value addition in their extraction industries, establishing highly developed industries from natural resources rather than exporting the raw mineral ore. South African and Botswanan diamond polishing industries, for example, are well developed. Experts suggest that African nations need to integrate into regional and global value chains and promote horizontal and vertical diversification anchored in value addition, innovative approaches and
local content development. In his book, Looting Africa, Tom Burgis, a former journalist, argues that African nations can also keep resources in the country and implement high tariffs to protect domestic industries – a move he notes African leaders are reluctant to implement. According to Landry Signe, senior fellow – Global Economy and Development, Africa Growth Initiative, mining companies and African governments should also embrace Fourth Industrial (4IR) technologies. Artificial intelligence (AI), automation and big data can help mining firms boost productivity, reduce operating costs, improve working conditions and reduce the damage to the environment. A recent report by the Japan International Cooperation Agency (JICA) indicates that while African countries receive taxes and royalties from foreign firms extracting their minerals, many lack the broad governance mechanisms to invest in value addition and ensure broadbased growth in the mining sectors as well as regions where the extraction takes place. If, however, this challenge is overcome it would allow African economies to enjoy the full value offered by their natural mineral resources and unlock significant value for countries across the continent. ■
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