HIF, Freiberg 11.08.2015 The mining sector in Africa and the conflict minerals issue
Table of contents Mining sector in Africa Artisanal and smallscale mining Conflict minerals
Mining sector in Africa Natural resources in Africa are important for supplying the global economy while resource exports are central to the economies of many countries. Increasing demand (including in emerging markets) and increase in prices for individual commodities are a great opportunity for mining countries.
Mining countries across the world Russia 7% Canada 4%4% Canada Ukraine 1% EU 3% Kazachstan1% USA 6% USA 6% China 17% China 17% India 5% Peru 3% Indonesia 3% Brazil 6% 10-20% 5-10% 1-5% 0,5-1% 0,1-0,5% Australia 11% Chile 7% South Africa 6% World mining production in 2010: 610 B. USD* *not including oil resources Australia 11%
Africa s share in global mine production (2010) 70 %Part of the world mining production 60 50 40 30 20 10 0 6,6 15,4 3,5 18,4 6,7 6,8 3,5 0,5 61 52,5 40 15,7 37 19,1 2,8 8 9,7 4,8 0,6 2,8 5,7 7,2 2,3 0,3 2,1 3 4,2 2,8 4 4 0,2 2,5 1 1,3 0,2 Südafrika DR Kongo Sambia Mosambik Botswana Angola Ghana Guinea Simbabwe rest. Afrika
Share in global GDP and relevance of metals for export (Global GDP in 2014: 77,9 tn USD; Africa: 1,7 tn USD) Mainly mining Mainly refining Highest relevance (min. 50 % from exports or min. 30 % from GDP) High relevance (min. 25 % from exports or min. 20 % from GDP) Medium relevance (min. 15 % from exports or min. 10 % from GDP)
Mineral Provinces and Potential for new discoveries Areas covered with recent overburden (unknown underlying geology) PGMs 88 % Manganese 79 % Diamonds 56 % Cobalt 41 % Chromite** 40 % Gold 34 % Nickel 9 % Bauxite 2 % Copper 3 % Iron Ore 1 % Uranium* 11 % Petroleum* 10 % Natural Gas* 8 % Hard Coal* 5 % * 2007 data **database incomplete Reserve base 2008 Source: USGS, BGR Hannover, 13.11.2014 CSA Group Ltd., 2005
Attractiveness of exploration investments in Africa Country Geologic attractiveness Political stability Attractiveness for exploration investment Policy Perception Index Angola 45 58 39 Botswana 65 93 81 Burkina Faso 56 41 64 CAR 50 18 11 DRC 70 10 28 Eritrea 53 25 37 Ethiopia 50 46 13 Ghana 62 67 58 Morocco 69 83 57 Namibia 71 89 75 Niger 33 26 42 Nigeria 44 13 11 Sierra Leone 36 31 37 South Africa 58 22 45 Tanzania 60 58 55 Uganda 41 42 45 Zambia 76 62 52 Zimbabwe 56 4 10 Source: Fraser Institute Mining Survey 2014
Reasons for Underperformance of the Mineral Sector in Africa Political and economical instability causes investment risks Corruption increases business costs and illegal business transactions Insufficient infrastructure causes high logistic costs Shortage of skilled labour in the mining sector In general: Unattractive business environment causes low Foreign Direct Investments in the mining sector in Africa
Artisanal and Small-Scale Mining (ASM) ASM is a livelihood that is found mainly in poor rural regions of developing or newly industrialized countries as a way of subsistence or as a small business. It is labor intensive associated with little to no mechanization.
Artisanal coltan mining in Mutala, Mozambique Source: BGR, 2009
Artisanal gold mining in Merela,Tanzania Source: BGR, 2005
Artisanal tin mining in Salukwongo, DRC Source: BGR, 2015
Characteristics of ASM in Africa Informal mining most of the time, sometimes illegal Poor safety, health and working conditions Impacts the social environment (migration, child labour...) High accumulated environmental impact Low productivity and low accessibility to the market
Characteristics of ASM in Africa High potential for development Real transfer of local know-how Supports the local markets and increases purchasing power Provides employment for young people in isolated regions Supports community development indirectly
Share of the population depending on ASM Africa Latin America Central and SE Asia World Workforce 2015 (Millions) 9.1 1.6 12.8 23.4 Number of dependents 43.5 6.5 56.1 106.1
ASM share of the world production Commodities ASM share of the world production (%) ASM workforce per commodity (Million) Metals Mass commodities (semi-) precious stones Antimony <1% 0.001 Chrome 18 0.252 Cobalt 19 0.169 Copper 4 1.103 Gold 8 2.032 Iron 3 1.400 Lead 2 0.029 Manganese 10 0.257 PGE 2 0.094 Silver 15 0.438 Tantalum 61 0.011 Tin 45 0.655 Tungsten 4 0.023 Zinc 3 0.140 Coal 13 4.77 Sand and gravel 30 10.84 Fluorite 16 0.059 Diamonds 14 0.306 Gemstones 80 0.867
ASM associated with conflicts in Africa (in 2009)