Cape Town - The mining business in Africa could not continue “as usual” in the context of nearly half of all Africans living on below US$1.25 a day, Anita Marangoly George, senior director of global practice on energy and extractive industries at the World Bank Group told the Mining Indaba on Wednesday.
This poverty prevailed despite the fact that Africa had 30% of the mineral wealth of the world. “Close to 50% of Africans live below a dollar twenty five a day… that is clearly unacceptable.”
Speaking on the power of mining to transform development in Africa, George said big mining companies had to play a developmental role in the economy which included assisting smaller mining companies to develop the skills of the trade while, at once, and ensuring that local communities felt economically integrated in mining activities.
As protestors from the Alternative Mining Indaba – led by the Bench Marks Foundation – protested outside the Cape Town convention centre where the Mining Indaba is being held, the World Bank Group official said: "We cannot sit back and continue business as usual.”
“The statistics are frightening,” she said, noting that in Nigeria there was a population of 170 million with 60% of them under the age of 25 of whom 30% were unemployed. “This is unsustainable,” she said.
The Democratic Republic of the Congo had rich resources of hydro-electric power capacity – about 100 000MW potential supply – yet one in three Africans lived without electricity.
Across the continent there was limited access to education, water and sanitation and health care.
‘Consistency of policy paramount’
While mining companies should not “jump into” the role of government” or even of development institutions, there was an obligation on them meant to share the benefits of mining "[by] making sure that all people on the continent benefit from the mineral wealth”.
In the context of the cost of commodity prices going down globally and many of the budgets of countries down considerably, she said some may suggest that it was not a time to talk about nation-building. She insisted that these were the very times “that we have to think about development”.
One of the solutions was that mining firms should become “anchor clients” for energy suppliers to improve the credit worthiness of projects – allowing the extracted projects to be produced at a reasonable price - while also supplying communities with energy.
“This may sound like motherhood and apple pie… but I believe working together we can produce results,” she said.
George made a call for governments to provide policy certainty to mining companies – a long term investment industry. “Consistency of policy is paramount,” she said, noting that the World Bank was involved in ensuring transparency in the extractive industry as well.
Improved transparency of the governance of the extractive industry in Tanzania, for example, had the impact of quadrupling the mining investment in that country.
Partnering of big and small mining companies “can have a multiplier” impact. The World Bank had worked with small mining companies, and the larger companies like Anglogold Ashanti and Acacia Mining to ensure that the latter’s skills filtered down to the small companies.
“Large scale mines are donating the time .. in the area of geology, health and safety issues.” Small scale mining employed 1 million people in Tanzania and this partnership was having a positive impact on the lives of these people.
The World Bank Group was also focusing on providing finance to small scale mining operations often not accessible from other sources, she said.
While governments were wanting “a bigger share of the [mining] pie”, the World Bank was working on ways to resolve how the risks and rewards should be shared by the private sector and governments.
George particularly paid tribute to Newmont Mining Corporation, Rio Tinto and Anglo American for their positive roles in Africa. While formal unemployment rates of women can be as high as 90% in some mining areas in Africa, these companies had done “a phenomenal job of ensuring strategic investments for small entrepreneurs including women entrepreneurs”.
Outside Alternative Mining Indaba activists gave Mining Indaba delegates leaflets in which Bishop Jo Seoka, chairperson of the Bench Marks Foundation, called for government to establish a central fund to which all mining companies must contribute so local communities can hire independent legal and environmental experts to take on mining companies.
The Foundation also called for a direct proportion of mining taxes and royalties to go to local governments in South Africa to cope with housing and infrastructure needs in mining communities.
It called for an end of politicians and civil servants serving on mining company boards and called for laws to prevent sell-off of mines “just before resource exhaustion and mine closure”.
Many of the activists lay on the ground outside the entrance to the mining indaba to symbolise the deaths of miners at the Marikana mine in 2012 when police opened fire on striking mineworkers.
The Foundation also called for a statutory increase in local employment and a living wage for mine workers based on family needs, savings, recreation, education and the developmental needs of workers.