AFRICA has been warned to steer clear of export bans on undeveloped minerals until infrastructural deficits are tackled.
Benedikt Sobotka of Kazakh miner Eurasian Resources Group (ERG) said mineral export bans were not automatically beneficial judging by the number of African countries that have implemented and then waived them.
In June 2023, Ghana placed a ban on the export of certain raw minerals, including lithium, following in the footsteps of Namibia and Zimbabwe which had both banned the exports of raw lithium months earlier.
Speaking at the Mining Indaba conference this week Sobotka and Shirley Webber, a banker at Absa Corporate Investment Banking, said a reliable electricity supply as well as freight and port infrastructure were critical to the development of a minerals downstream sector.
Indonesia has a well-developed downstream processing industry but it first attracted $15bn in development capital in order to develop it. But there is a caveat to Indonesia’s beneficiation success as it is reliant on coal-fired power generation for its processing plants, which means the processing of green minerals is highly carbon intensive, said Sobotka.
This poses a significant risk considering that countries in the European Union implemented the first phase of its Carbon Border Tax Adjustment Mechanism (CBAM), which means there will be a premium on carbon-intensive imported goods entering the EU.
The African Development Bank cautioned at last year’s COP28 conference in Dubai that Africa stand to lose up to $25bn per annum as a direct result of the EU’s carbon tax.
Webber said the lesson for Africa is that beneficiation of green metals cannot happen without renewable energy. African countries ought to collaborate in regional beneficiation hubs such as the partnership between Zambia and the Congo to produce nickel, manganese, and cobalt battery precursor minerals.
In a separate discussion on resource nationalism around mineral assets, Hulme Scholes, a mining attorney, said governments should – as a rule – not get involved in any form of mining activity, except to make the investment environment as friendly as possible through a sound tax regime, a user-friendly mining licencing system and online geological database and a predictable royalty rate.
Scholes was also critical of beneficiation imperatives. “If market conditions determine that it makes sense to beneficiate, then do it.”
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