Graphic Business News

Increasing mining services in Africa...Key to industry’s long-term sustainability

By: Graphic Business
It is imperative to link the market of mining goods and services
It is imperative to link the market of mining goods and services

An Industrialisation Adviser, Seth Akweshie said increase in demand for mining goods and services was necessary to grow industry in Africa Southern African Development Community (SADC).

He told delegates at the Cross-Border Mining Services Indaba in Johannesburg that most inland developments in African have been established owing to nearby mining activities.

“The economic landscapes in most African countries have been shaped by the mining sector. However, our reliance on the mining sector has been skewed almost exclusively towards a heavy dependence on extractive activities and consequently, our economic fortunes or misfortunes continue to be dictated largely by the fluctuations in the international commodities market, over which we have absolutely no control,” he said.   

A major issue that needed to be addressed, he said was how to grow the demand for mining goods and services in Africa to ensure the long-term sustainability of this industry.

He added that the market for mining goods and services was fragmented and that it was imperative to find ways to not only link the market but also consolidate the demand for various supplies. 

“With a continental market that is artificially segmented by so many national boundaries, we need to create another supply centre outside of South  African to cater for the “far-away places” to ensure that gold mining operations in Ghana, Mali, Tanzania, the Democratic Republic of Cong and Zimbabwe receive the same quality of inputs and services as the ones in South Africa,” he said.

Aiding devt
Mr Akweshie, meanwhile, pointed out that the African Union's African Mining Vision (AMV) had been developed to derive greater socioeconomic benefits from the continent’s mineral resource endowments.

The AMV statement calls for transparent, equitable and optimal exploitation of mineral resources to underpin broad-based sustainable growth and socioeconomic development.

Two of the broad areas outlined in the vision are a knowledge-driven, African mining sector that catalyses and contributes to the broad-based growth and the development of a single African market.

“This can be achieved through downstream linkages into mineral beneficiation and manufacturing, upstream linkages into mining capital goods, consumables and services industries, and side-stream linkages into infrastructure,” Akweshie said.

Further, the action plan for implementing the AMV lists a plethora of constraints to the achievement of the vision, he said, adding that owing to these constraints, Africa has not been able to benefit fully from the exploitation of its mineral resources.

“To address these constraints, the action plan recommends a number of tenets one of which is developing a diversified and globally competitive African mineral industry which contributes to broad economic and social growth through the creation of economic linkages.”

Clearly, there is a desire by Africa to work together in addressing its economic challenges, he said.

Akweshie highlighted that this was evident in initiatives such as the recent signing of the African Continental Free Trade Agreement (AfCFTA) in Kigali, Rwanda, earlier this month.

The United Nations Economic Commission for Africa estimates that the AfCFTA has the potential to boost intra-African trade, currently standing at 15 per cent we of the total, by 53.2% by eliminating import duties.

“In that regard, it would be helpful to also consider the potential for broader economic linkages with other economic sectors in the context of the industrialisation efforts in the various regional economic communities,” Akweshie said.

He added that the SADC ‘Industrialisation Strategy and Roadmap 2015-2063’ identifies three paths for the region’s economic and technological transformation by moving from a factor-driven development phase to an efficiency-driven stage and ultimately to an innovation-driven stage.

The strategy identifies the development of value chains as the way to go with minerals beneficiation and downstream processing as one of the three growth paths for the SADC economies.

The action plan for implementing the SADC Industrialisation Strategy and Roadmap identifies the development of value chains in the minerals and beneficiation cluster as a critical aspect of the industrialisation process.

In particular, the capital goods cluster, comprising machinery and equipment will be targeted for development.

“The supply of mining goods and services falls well within the sphere of targeted areas for which considerable efforts will be directed as one cannot effectively develop the mining value chains without emphasis on developing the upstream, downstream and side-stream activities,” he said. Miningweekly/GB