Eunomix CEO Claude de Baissac yesterday urged African countries to band together and use the demand for critical minerals to leverage their resource endowment to boost economic growth.
Speaking at the second African Minerals Summit in Johannesburg yesterday, De Baissac said Africa was standing on the precipice of a transformative era.
“The global transition to clean energy, the digital revolution, and the transformation of mobility have created unprecedented demand for minerals that our continent possesses in abundance,” he said.
“From the copper belt of central Africa to the rare earth deposits of southern Africa, from the lithium reserves of Zimbabwe to the cobalt wealth of the Democratic Republic of Congo, our continent holds the key resources that will power the world’s future.”
Africa’s resource endowment means it has 30% of global mineral reserves, 40% of global gold reserves, 60% of global cobalt reserves and 80% of global platinum group metals reserves.
“However, as we all know and lament, this endowment has not translated into industrialisation, let alone durable development and mass employment and middle class creation,” de Baissac lamented.
However, the geopolitical changes subsequent to the Russian invasion of Ukraine in February 2022 meant that African countries could now play off the Great Powers against each other, and gain benefits for their citizens.
De Baissac said that regional integration needed to be promoted to create a combined market size that would allow manufacturers to achieve economies of scale and move away from resource-centric development models.
“The evidence suggests Africa must leverage current geopolitical competition to negotiate better terms while building regional integration to achieve the scale needed for competitive manufacturing, and from there progressively enter the minerals value chain,” he concluded.
Last year at the inaugural African Critical Minerals Summit, Minister of Minerals and Energy Resources, Gwede Mantashe, said South Africa was in advanced stages of developing a critical minerals strategy to help industrialise and support the country’s just energy transition to a low-carbon future.
However, neither the Department of Minerals and Energy Resources nor the Department of Trade, Industry and Competition were present at this year’s edition, even though they had received invitations and said they would attend, but both had last minute withdrawals.
The only State entity that was present was the Council for Geoscience, and Dr Assine Tshibubudze outlined what the Council was doing in filling in the gaps in South Africa’s geological mapping.
“The country was at 5% coverage before the implementation of the programme, but by end of 2023/24 financial year, onshore coverage has increased to 16%,” he said.
The R400 million Junior Mining Exploration Fund (JMEF) is aimed at encouraging junior miners to explore for the critical minerals of copper, nickel, lithium, and rare earth elements.
Dr Manie Kriel, CEO of VBKom, spoke on how to reinvigorate the South African mining industry and the future of mining on the continent.
He noted that the average American needed 3.19 million pounds of minerals and fuels during their lifetime and as the world’s population grew, so would the need for more minerals.
According to him, mining in South Africa contributed 21% to GDP in 1980 when the gold price shot up and was then a great contributor to the fiscus through taxes.
However, the mining industry has been in steady decline for the past two decades and his research on why there was so little exploration to replace depleting mining resources found that 68% of surveyed junior mining companies said the regulatory environment was their greatest impediment to success, while 23% of surveyed junior mining companies mentioned a lack of funding as their greatest challenge.
BUSINESS REPORT