African Business 2020 edition

OVERVIEW
to price fluctuations that
can trigger recessions.
Other problems include
political instability (although
the outlook has improved
recently), poor logistics,
unreliable power supply and
unpredictable regulatory
regimes. This can include
demands that local companies
be included in transactions
and variable tax and royalty
conditions. The African
Development Bank (AfDB)
reports that mining royalties
as applied in 2016 in Africa’s 21
gold-mining countries, ranged
from 2% to 12%.
The Economic Community
of West African States (ECOWAS)
stated in 2000 that it intended
to align countries’ tax and
customs regimes and to create
mining codes that did not differ
sharply from one another. The
code was not implemented but
there is an increasing awareness
of the importance of regional
(and continental) consistency
on this score.
Another aspect that needs
the attention for African mining
to reach its full potential is
geodata. There are very few
places that have good systems in
place to assist exploration efforts
with reliable and detailed data.
Minerals for the new age
New finds of “old” minerals
are happening across Africa:
gold miners are very bullish in
West Africa and Vedanta Zinc
International is developing
a huge mine in South Africa,
but the big story is in minerals
relevant to the new economy.
The announcement by the AfDB that it was “getting out of
coal” in 2019 was a clear signal that the move away from fossil
fuels is gathering speed. The bank has created a $500-million
green baseload scheme to assist African countries to transition
from coal-fired power plants to renewable sources. The bank
expects the fund to yield up to $5-billion in investments.
The most important minerals in the age of computers
and electric vehicles are cobalt, platinum, lithium, graphite,
vanadium and manganese. Africa is a global leader in these
minerals too. The DRC has more than 60% of the world’s
cobalt resource.
The critical metals in new battery production are lithium,
graphite, cobalt and nickel. A research body estimates that
the global lithium-ion battery market could be worth as
much as $77-billion by 2024 (Transparency Market Research).
Beyond the DRC, countries such as Madagascar, Morocco,
Mozambique, Namibia, Zambia and Zimbabwe stand to
benefit from this boom.
The Global Battery Alliance claims that lithium-ion batteries
can significantly reduce emissions in the power and transport
sectors. At the 2019 Batteries and Electric Vehicle Conference,
the MegaMillion Energy Company launched Africa’s first
lithium-ion factory. The company will operate out of the Coega
Industrial Development Zone in Port Elizabeth, South Africa.
Also in South Africa, Thakadu Battery Materials is building
a plant to beneficiate impure nickel to produce high-purity
battery-grade nickel sulphate for the lithium-ion battery market.
Copper and copper alloys are also important for electric
vehicles, smartphones and computers. The Central African
Copperbelt (encompassing parts of the DRC and Zambia)
increased mined volumes to 2.2-million tons in 2018, more than
twice the 800 000 tons mined in 2008.
Platinum’s role in the creation of hydrogen makes it a vital
component for the fuel cell industry. South Africa, which
produces more platinum than all the other countries in the
world combined, is investing in research into new uses of
platinum. Zimbabwe also produces platinum. ■
Online Resources
Africa Mining Vision: www.africaminingvision.org
Ecowas Federation of Chambers of Mines: www.efedcom.org
Global Battery Alliance: www.weforum.org
International Association for Engineering Geology and the Environment:
www.iaeg.info
Investing in African Mining Indaba: www.miningindaba.com
Mining Industries Association of Southern Africa: www.miasa.org.za
37 AFRICAN BUSINESS 2020