Rising urbanisation in Africa could spur governments to breathe new life into the development minerals sector
DAKAR, On a continent better known for enriching colonisers and corporations by exporting its gold, copper and diamonds, so-called “development minerals” – ranging from limestone to granite – could help Africa fuel its own economic growth.
The sector, estimated by the United Nations to employ at least 8 million Africans, could create millions more jobs across the continent – many for young people and women – to meet a fast growing need for housing and infrastructure, mining experts say.
Development minerals refer to materials and minerals that are considered low-value – such as granite, gravel and sand – and are mined, processed, manufactured and used locally in industries from construction and manufacturing to agriculture.
“They are significant because the population of Africa is going to keep booming, with many living in urban environments,” Antonio Pedro, the Central Africa director at the U.N. Economic Commission for Africa, told the Thomson Reuters Foundation.
“The potential of these minerals for local economies is much higher than for metallic or precious minerals, as entry barriers like research and development, and capital, are lower,” he said.
The European Union, the African, Caribbean and Pacific (ACP) nations and the United Nations Development Programme (UNDP) in 2015 launched a $14 million project to boost the fledgling sector and improve its oversight.
But like Africa’s big extractive industries – plagued by problems from child labour to poor health and safety standards – the potential of the development mineral sector may be held back by labour and rights abuses unless it is properly regulated.
“These commodities (development minerals) aren’t going to fuel wars or foul rivers,” said Daniel Franks, manager of the ACP-EU development minerals programme.
“Yet there are a large number of labour and health and safety issues which are common throughout the sector … and child labour is prevalent,” he added.
African governments have long been encouraged, or pressured, by multinationals to prioritise the mining of metals for export, which generate quick and big returns for national coffers while allowing authorities to take a back seat, industry experts say.
“Governments are extracting the royalties, rather than using them to develop expertise locally or improve the mining sector,” said Gavin Hilson, a professor and the chair of sustainability in business at Britain’s University of Surrey.
“But there is potentially serious stream of revenue from artisanal and small scale mining if you regulate it and tax it properly.”
Decades of neglect have led to poorly designed or implemented policies for small-scale mining, and a lack of rights and support for miners, the United Nations says.
But rising urbanisation in Africa could spur governments to breathe new life into the development minerals sector.
Half of all Africans will live in cities by 2030, from 36 percent in 2010, according to the World Bank. To cope with population growth, Africa’s major cities will need more roads, hospitals and power stations.
Around $360 billion in infrastructure investments are needed by 2040 to make the continent competitive and productive, the African Development Bank says. For each billion invested, between 3 and 7 million jobs are created, it estimates.
Plunging commodity prices – which saw economic growth in sub-Saharan Africa slump to a two-decade low last year – could also prove a catalyst for the development minerals sector.
Nigeria, a major oil producer, is looking to diversify its economy away from a reliance on crude production amid its first recession in 25 years, and small scale mining is on the agenda.
“Previously, the government was only interested in tax revenues (from the mining sector),” said Nigerian civil servant and mining official Sam Hart. “Now, productivity comes first.”
In many countries across the continent, informal precious metal and diamond mines are often prey to violence, control and extortion by armed groups, and even the police and military.
“But when you open a granite mine, hundreds of people aren’t going to come to argue, fight, and demand money,” said Bob Andriamifidy of Progranit, a granite mining firm in Madagascar which has a public project for constructing rural roads.
And in a continent with high levels of youth unemployment, the development minerals sector employs many youth and women – estimated to make up over 40 percent of the workforce.
To encourage the sector to grow without exploiting its workforce or polluting the environment, the ACP-EU project is working with governments, small mine operators and communities to provide training and boost regulations on health, safety and the environment.
While mining experts, officials and operators are quick to hail the promise of development minerals, it could take a long time for that potential to be fulfilled, according to Dirk Willem te Velde of the Overseas Development Institute (ODI).
“Institutional constraints are holding back the sector – there are a huge amount of natural resources in the soil across Africa,” said te Velde, senior research fellow at the ODI, a UK-based thinktank. “Good governance and regulations are key.”