The Invest in African Mining Indaba, the world’s largest mining investment conference aimed at the capitalisation and development of mining in Africa, took place in Cape Town earlier this week, between 6 and 9 February 2023. As always, the Indaba was well attended by key industry stakeholders across the board, including President Cyril Ramaphosa, and investors. The President emphasized the mining sector’s crucial role in ensuring economic expansion and job creation in South Africa.

While the importance of the exploration, development and extraction of minerals and production of mineral products has been iterated previously on African Trade Remedies, the untapped natural resources in Africa and the Western shift to diversify from the dominance of China has been apparent from the Indaba. As background to the potential Africa has to compete in the global mineral trade, it is noteworthy that, for example, the Democratic Republic of Congo is the producer of approximately 70% of the global cobalt supply, South Africa has the largest global supply of manganese, and Mozambique and Madagascar have major shares of graphite.

We noted that countries such as Zimbabwe and Namibia are focusing on the development of their processing and refinement industries to ensure the increasing global demand for battery materials is captured and profited from. In light of the increasing movement toward environmental legislation, which clamps down on greenhouse gas emissions, and concomitant industry shifts such as the automotive industry’s shift toward electric vehicles, the demand and prices for certain inputs (such as lithium) have sky-rocketed.

 

Despite China having reigned bullishly over the minerals market for several years, the West has by no means been covert regarding its intention to diversify its source of mineral supplies away from China. For African mineral producing countries, the Western shift presents an opportunity to retain more profit in respect of its resources by, inter alia, expanding into value-adding processes such as crushing, grinding and flotation concentration.

In addition to a number of countries’ plans to expand their mining processes, a number of African jurisdictions  indicated their intention to curb the range of illicit activities that take place in the African mining industry. For example, Zimbabwe announced late last year that it was banning the export of raw lithium, subject to the caveat that mining companies that obtained special written permission to export, were allowed to do so. This measure had the dual purpose of curtailing lithium ore smuggling and allowing Zimbabwe to expand its mining beneficiation market. Buy limiting the Zimbabwean market to extraction processes rather than expanding it into beneficiation processes, the mining market has reportedly lost out on an approximate 1.7 billion euros in revenue from the export of raw minerals.

With countries such a Zimbabwe, the largest lithium supplier in Africa and home to an estimated fifth of the global lithium needs, affecting legislative amendments and expanding into the mining sector to accommodate the heightened demand for minerals, the sea of change in terms of African countries’ mining sectors is evident and momentous.

Similarly, Namibian representatives at the Mining Indaba indicated that the Namibian mining sector is also undergoing major change. Minister Tom Alweendo, who was present at the Indaba, indicated that there is a need to provide consumers with flexible and accessible access to renewable energies, as the country shifts to green hydrogen. This, Minister Alweedo said, is a shift that aligns not only with the country’s ESG obligations, but also the sentiment of investors at this time.

The conclusion of the African Mining Indaba has reiterated that Africa is well positioned to become a reckoned supplier of minerals and metals that are increasingly sought globally by countries looking to transition from fossil-based energy sources to renewable sources.