During the first week of March, Africa’s development finance leaders convened in Zimbabwe for the UNECA-hosted COM2024 summit amid a wavering continental growth agenda. Recognising that many SDG and African Union Agenda 2063 targets remain far out of reach, participants focused discussions on overhauling the global financial architecture to help generate the massive funding Africa needs to accelerate inclusive, sustainable growth.
According to World Bank Institute economist Hippolyte Fofack, the Bretton Woods system, comprised of International Monetary Fund (IMF) and World Bank, has largely failed to help Africa unlock its significant economic potential. Fofack notably highlights how decades of underinvestment in the continent’s human capital have undercut the entrepreneurship, technical skills and infrastructure required to attract investment in high-value regional industries fueled by its natural resource wealth.
With African leaders providing a promising economic vision, the mining industry is set to play a foundational role in the continent’s industrial transformation, as leading firms accelerate the socioeconomic and environmental innovations positioning Africa to take a new path in the 21st century.
Evolution of human-first mining
As KPMG’s recently-published Mining Risk Forecast 2024 underlines, ESG considerations have risen to the top of the industry’s agenda in recent years, with tackling climate change, safeguarding biodiversity and cultivating strong community relations no longer “nice-to-haves” but core operational priorities for companies on the cutting-edge.
The ‘S’ in ESG even has a specific term in the mining industry – ‘social license to operate,’ a measure of a project’s acceptance by local communities that has increasingly come to define what “good mining” looks like over the past two decades according to Africa-focused risk analyst Vincent Rouget. Chinese mining company CMOC is among the industry leaders that has fully embraced African governments’ rising expectations to ensure that the extraction of critical ‘green transition’ minerals generates local socioeconomic value.
As the world’s largest cobalt producer, CMOC mobilises its considerable presence in the Democratic Republic of the Congo to not only provide jobs and training for local residents but empower them with the wider range of resources they need to thrive. In 2023, CMOC spent a total of $42.08 million in community projects. At its Tenke Fungurume Mine (TFM), CMOC is investing over $30 million in its communities over the coming years, with project areas including economic development, public health and infrastructure.
In addition to the ongoing construction of 9 local primary schools and a host of other social initiatives, TFM has funded a nearly-completed electrification project that will help provide local communities the significant energy resources needed to realise the DRC Government’s plans to manufacture EV batteries with locally-sourced cobalt, which CMOC has committed to supporting to promote industrial development. Paired with its membership in the Fair Cobalt Alliance, CMOC will help embed supply chain safety, human rights and sustainability as the pillars of this economic transition.
Sustainability at heart of mining innovation
Given the need to reconcile industrial development, climate and biodiversity imperatives, incorporating sustainability in the mining industry has never been more vital. As mining consultant Jaime González has aptly noted, this accelerating societal evolution has inspired the industry to adopt both ‘Green Mining’ decarbonisation and ecological-value creating ‘Sustainable Mining’ innovations.
South African giant Impala Platinum has established a strong position in this space, joining the growing group of miners capitalising on the continent’s abundant renewable energy potential. As part of its ambitious decarbonisation strategy, Impala Platinum recently announced plans to build a 100 MW solar plant to power its massive Rustenburg mine with clean electricity, complementing substantial carbon emissions savings from its range of energy-efficiency measures.
To mitigate its ground disruption and waste generation, Impala Platinum has delivered an increasingly ambitious project to ‘re-mine’ waste rock at Rustenburg, enabling the firm to recover millions of tonnes, notably in partnership with a local reclamation company created with the surrounding Luka community that has created good-quality jobs for residents. What’s more, this initiative has spurred a land rehabilitation process unlocking some 200 hectares of healthy land for the community.
Beyond merely reversing its operations’ land disturbance, Impala Platinum’s proactive commitment to biodiversity has seen it place these considerations at the heart of its planning and decision-making, from strict internal environmental authorisation processes to site-specific biodiversity management plans. On the ground, its projects include the conservation of key bird species and tackling invasive species at its Rustenburg site.
Building on mining foundation
In addition to meeting vital local and global needs, the African mining industry’s ongoing transformation is equally set to help attract crucial foreign investment in its downstream manufacturing sectors, which in turn will lay the foundation for enhanced regional economic integration and accelerated sustainable development progress.
As Hippolyte Fofack has recently written, this rise in capital “financing would accelerate…the implementation of the African Continental Free Trade Area (AfCFTA), the regulatory initiative to eliminate intra-African trade barriers and fuel strong regional economies. At COM24, African leaders notably discussed a new UNECA report revealing the continent’s concerningly-weak regional integration progress, with the fact that African countries continue trading more with the other parts of the world than among themselves highlighted as a significant development obstacle.
Regarding the AfCFTA, whose full realization would assemble 55 AU countries and represent a combined GDP of over $3 trillion, the UNECA report has highlighted a series of roadblocks, from slow progress in ratifying key protocols on free movement and good governance to the rising wave of military coups and a massive infrastructure funding gap – most problematically for the energy and transport infrastructure needed to underpin robust regional supply chains.
By combining expanded regional regulatory harmonisation and railways with ESG-driven mining, Africa would be able to ramp up the industrial transformation of its natural resources into lucrative products in high demand on the international market. In effect, this development would spark a virtuous cycle helping countries attract foreign private and multilateral investment – particularly if paired with the Bretton Woods reform that COM24 participants recently advocated for to transform Africa’s economic future.
