The African mining industry is at a crossroads, facing both opportunities and challenges as it strives to sustainably meet the rapidly growing demands for mineral resources. The mining sector is critical to the continent’s economic development, providing employment and contributing significantly to the GDP of many African countries. According to Statista, Africa has abundant reserves of minerals and metals, including gold, diamond, cobalt, bauxite, iron ore, coal, and copper spread out throughout the continent. Africa continues to be a major producer of many important mineral commodities for the world.
Statista also estimates that over 30 percent of the world’s known mineral deposits are found in Africa, and these valuable resources have long been extracted and frequently exploited. Foreign investment is still quite attractive to the region, especially from China, which in 2020 invested more than USD 8.9 billion in Africa’s mining sector, with Lithium, Cobalt and Copper being significantly focused on. China has a high demand for raw materials because it is a significant electronics producer. According to VOA News, any country interested in the energy transition will need these rare earth metals. The demand for these minerals has seen the US and China go head-to-head to establish themselves in Africa to cooperate with countries to get ahead in the energy transition and move toward net zero.
African countries with mining as a key economic pillar should look into innovative yet progressive ways of optimising opportunities and maximising the benefits. This will ensure that the sector is self-reliant, a challenge continuously plaguing the industry. Therefore, there are key trends that businesses and industry players need to adopt to shape the future of mining in Africa, as listed below:
- Technology and Innovation
As the demand for minerals and metals continues to grow and the world races to net zero, the need for innovative and sustainable mining practices is greater than ever. The industry will need to adopt new technologies and processes to increase efficiency, reduce costs, and minimise the environmental impact of mining operations. This is particularly important for unlocking mining investments and making the value chain more sustainable.The adoption of new and improved Technology will enable businesses in the Mining sector to increase productivity while experiencing improved performance and efficient operations. In the long run, this enables mining businesses to boost productivity and limit spending. – Arshad Dudhia, Managing Partner, ALN Zambia
- Accessible and Reliable Power
The link between clean power and mining cannot be overstated. Reliable and sustainable power is essential for the efficient operation of mines and to meet the increasing demand for electricity in Africa. The mining sector must work with governments and private sector companies to develop clean power solutions that are accessible and affordable. - Diversity, Equity, and Inclusion
The mining sector must strive to create a more diverse, equitable, and inclusive workplace and encourage practices that promote these values throughout its operations. This will require significant investment in education, training and development programs that support a more diverse workforce. Addressing equality will not only make the sector more inclusive, but it will also help to attract and retain the best talent. - Responsible Mining Practices
Responsible mining is a critical aspect of the industry’s future, both from a social and environmental perspective. The industry must work closely with communities and governments to ensure that mining operations are aligned with local development needs and to promote sustainable practices throughout the value chain. This includes addressing issues such as labour rights, environmental impacts, and the responsible use of minerals. - Governance
Companies that embrace strong corporate governance and prioritise transparency will be better positioned to attract investment, build trust with stakeholders, and meet the rising demand for sustainable minerals. The industry must be held accountable for its actions, including implementing responsible and transparent reporting and business practices and ensuring that the company’s decision-making processes align with key stakeholders’ best interests.The Mining sector needs to focus its attention on rapidly shifting issues that have only begun making their way into corporate agendas in order to bolster their governance processes. These processes include their approach to issues such as ethical conduct, diversity and inclusion, human rights and cybersecurity. – Oludare Senbore, Partner, ALN Nigeria
- Regulatory Environment
The regulatory environment plays a critical role in the success of the mining sector. Mining industry players must work with governments to create an environment that supports investment, innovation, and sustainable mining practices. This will require the development of clear and predictable regulatory frameworks that promote investment, growth, and sustainability.A commercially, socially, and environmentally sensitive regulatory framework is necessary to drive the sustainable growth of the mining sector in Africa. Governments, industry experts and investors will need to align on key priority areas and craft enabling laws which reflect the unique circumstances of relevant projects against the backdrop of a rapidly changing sector that is heavily influenced by local and global factors. – Shemane Amin, Partner, ALN Tanzania
Conclusion
The African mining industry is poised for significant growth and has the potential to play a major role in the continent’s economic development. However, to unleash its full potential, the industry must address the challenges and opportunities shaping its future. This will require significant investments in technology, innovation, education, training, and the development of a supportive regulatory environment. The race to net zero and the increasing demand for minerals in the face of rapid urbanisation will require the industry to adopt more sustainable and responsible practices.
With the right investments of time and resources, the African mining sector can become a leader in sustainable and responsible mining practices, providing significant benefits to the continent and its people. The industry has a unique opportunity to unlock its potential. The onus is on relevant stakeholders in the value chain, including as consumers, to drive the change necessary to make this a reality.
