Where is Africa when Africa is being discussed?

When the who ’s who of mining converge, one can expect nothing less than the finest thought provoking and somewhat mind-boggling numbers to be shared. The Investing in African Mining Indaba 2013 was no exception, attracting leaders from various facets of the mining industry from all corners of the globe. Africa, the new frontier of the 21^st century, is set to become the largest supplier of precious minerals, base metals and chemical minerals in the future. If current trends continue, Africa could be supplying 50 - 75% of the world’s minerals as the developed world experiences depletion in their own mineral resources. While many perceive Africa’s embryonic stage of economic development as an obstacle, the business world sees this as an opportune time to scramble for Africa yet again. The acquisition of assets at this stage is much more cost effective for those in positions to acquire funding and finance operations across all sectors.

While foreign investment is vital for the development of the mining sector, it comes with adverse effects that may see African economies further plagued with issues of lopsided distribution of income and neo-colonialism. Mining companies which presented white papers, among them Rio Tinto, Anglo American, Lonmin and other large corporations with operations in various parts of Africa, divulged current and future plans to bring about social development. It seems mining companies are of the standpoint that enough is being done to give back to the mining communities in which they operate while a prominent executive went on to say, “ governments often ask for more than they are willing to give…”

The extent to which this statement holds water may be debatable but the vital question that remains unanswered is “To what proportion do social development projects equate to the value of mineral resources mining companies stand to gain?” Taking into account the capital intensive business that mining is, it can be understood that miners should have room to somewhat dictate the terms. However, left in the bank, would the large amounts of money yield much without assets such as the rich mines of Africa to generate profit?

The debate of sustainable development rages on, perhaps a one sided one, as there seemed to be a bias towards those who have the voices to speak at such forums as the Mining Indaba. The consensus among speakers was to engage all stakeholders in mapping the way forward for African mining, yet sadly, all stakeholders were not well represented.

It may be easy to berate tales of injustice and negate the good that mining has contributed to Africa through backward looking but if Africa is to truly benefit from the vast resources she boasts of, a number of things need to be put in place. While this is not an antidote to the problem of Africa’s poverty, it may very well be one of the many steps to making Africa at large experience more economic growth.

• Easy access to information on opportunities available in mining
• Educate local communities on the various facets of mining to encourage participation
• Develop local and regional capital markets to encourage the participation of local junior miners to venture into the industry
• Education from the grassroots level of the geography and needs of Africa in order to foster innovative thinking
• Regional trade blocks to standardise regulations for the mining sector to eliminate double standards for multinational miners
• Regional research and training institutions to encourage development of home-grown solutions for deficits in technology and skills shortages
• Mainstream media to play a more active role in dissemination information and setting agendas that encourage participation 

Mamphela Ramphele Mining Indaba

BUILDING MINING INDUSTRIES OF THE 21^ST CENTURY: CAN WE GROW ECONOMIES BEYOND TRIPPINGS OF THE DUTCH DISEASE?

Cape Town, 6/2/2013

INTRODUCTION

Good morning distinguished guests, ladies and gentlemen. These are difficult times to be in the mining industry – even more so than a year ago when I first addressed you at the Mining Indaba. At that time the mining sector was already in the midst of the rising tide of resource nationalism and anti-mining sentiment. That sentiment has grown stronger world-wide. In South Africa, my beloved country, the legacy of the past has come home to haunt us in the tragedy that is Marikana and many other violent incidents that have come to characterise conflicts over scarce resources in our social relationships.

The benefits of high levels of mineral resources have in many cases across the world tended not to benefit the majority of citizens. There are exceptions. The Peruvian government ring-fences royalty payments for mining communities and spends the money there, while the way Norway manages its oil revenues is probably the closest we get to an ideal model. The Norwegian government only uses four percent of its oil revenues on expenditure, and the rest is invested in Norway’s Petroleum Savings Fund, focussing largely on investments to develop other sectors of the economy. Unfortunately these are exceptions and for the most, mining tax revenues vanish in the black hole that is the central fiscus and end up funding large rural estates for presidents.

Today I would like to take you on a journey of imagining a global mining industry that operates on a completely different model. I would like us to imagine a mining industry of the 21^st century that is both a catalyst and an engine of growth in both advanced and emerging economies. I would like to borrow the words of a friend and colleague, Gunter Pauli:

“Countries with rich mineral reserves and part of broad free trade zones are particularly affected by the globalized economy, where increased demand for raw materials pushes up commodity prices, which increase export revenues that strengthen the local currency against the dollar. A strong local currency driven by ore exports and direct foreign investments turn imports cheaper. This leads to a de-industrialization, or the impossibility to ever build an industry, and adversely affects agriculture that is dependent on overseas markets. This phenomenon is known as the “Dutch Disease”. It affects large commodity exporting nations like Colombia. (I must add South Africa at the top of the list).

The only way to respond to these adverse macro-economic effects of commodity driven export strategies is to change the business model of the mining industry. Evolving mining from a core business, focused on the extraction of ores and the export thereof to a clustering of mining, agriculture and manufacturing using all available resources of the mine, from land to energy and waste like rock refuse and tailings. The design of a positive response strategy to social challenges like artisanal mining, combined with securing a cluster of businesses around mining could reverse de-industrialization. Better, this could create an economy that remains vibrant after the mining operation have exhausted their resources. At first sight, the process of clustering industries and social needs have no relation. However this proven strategy that is now subscribed to by leading global corporations adds value and jobs, while strengthening each competitive position in every core business generating growth in the country.”[1]

My presentation today is intended to start the difficult conversations that are essential to such a re-structuring process in the mining industry. We often avoid difficult conversations because we believe that the business of business, as one CEO told me a fortnight ago, is to make money regardless of the socio-political environment. The reality is that in the 21^st century the inter-connected nature of economics, social and political systems, fuelled by rapid information technology knowledge and information dissemination, makes such a simplistic business approach unsustainable.

I will sketch what in my view are the key issues that the mining industry, governments and other regulators, workers representatives and unions as well as citizens in general should be discussing as a matter of urgency to set a new sustainable foundation for mining. The key issues are:

- How does one build a mine in the 21^st century to ensure that the benefits and risks of exploiting the resource base are shared more equitably by all stakeholders?

- How does one deal with legacy issues of old mine operations in a manner that enables fair co-ownership of the risks and rewards in a sustainable model?

- What needs to change in the framing of the paradigm of sustainable mining within a greater focus on sustainable economies and socio-political systems?

These difficult conversations have to be held in an atmosphere of candour, mutual respect and a focus on the common good for each country. Governments need to listen very carefully to mining houses and the industry as a whole. Of course when governments are truly representative and accountable to all the people, it needs to be a two-way street, and the mining industry needs to listen to them as well. But it is not helpful to imagine that governments are the only credible representatives of public good interests. Modesty on the part of governments is essential to minimize the risks of conflating governing party interests, government’s role as a regulator and the state as the custodian of inter-generational long-term interests of the society as a whole.

The private sector must confidently voice its views within the broad rubric of its accountability to its shareholders whilst mindful of the shared long-term interests of sustaining the industry in the challenging environment of the 21^st century. Silence in the face of abuse of power on the part of governments tends to come back to haunt industry players.

The workers and their representatives need to take a longer term view beyond annual wage increases. Issues of productivity, use of technology and innovative business models require openness to new opportunities. Defending existing jobs may ultimately be to the detriment of sustaining the industry with new types of jobs yet to be experimented with. Unions should be at the forefront of promoting innovation and productivity as the surest guarantors of sustainable rewarding jobs. The imperative of creating new types of jobs and livelihoods needs to be at the forefront of all the parties to conversations about sustainability. Union leadership is critical in forging partnerships that benefit society including future generations.

TOWARDS BUILDING 21^ST CENTURY MINES

The extractive mining industry models that have characterized mining in most countries of the world over the last centuries are being challenged on many fronts. The idea that economic and political elites can continue to capture the benefits of mineral and natural resources is not only morally wrong but bound to lead to civil conflict which is bad for everyone including business. Extractive industry modes are by their nature unsustainable given their failure to invest in innovation and creativity to enlarge the resource base and to allow new entrants to bring renewal to the industry. Instead, mining has more often than not relied on monopolistic business models that keep new entrants out thus limiting the possibility of new ideas.

Elite pacts that have underpinned most mining licence agreements across the globe are being challenged by local communities and civil society actors. Greater transparency is being demanded about the nature of the agreements, benefit sharing arrangements, environmental impact assessments and management of the mining footprints on ecological systems.

The proverbial resource curse has continued to plague most emerging economies where political elites are seen to be the sole beneficiaries of non-transparent licensing arrangements with industry players. Extractive industry approaches are often inextricably linked to extractive political systems driven by patronage networks that take home the greatest spoils. In such circumstances higher royalties and taxes do not necessarily benefit ordinary citizens who continue to live in grinding poverty. Post-colonial Africa has more than its fair share of countries caught up in the vicious cycle of the extractive industry mode in mining and other natural resources. Nigeria, Democratic Republic of the Congo, Angola and now increasingly my own South Africa are showing signs and symptoms of the resource curse.

Inclusive economic and political systems focus on institutions that emphasise meritocracy and promote the contributions of the best talents and creativity of their citizens to increase productivity and generate a sense of shared value in resources. Unfortunately, South Africa has sustained an extractive economic system that started with mining and energy companies, but now includes monopolies in many other sectors including many serviced by large and powerful – and not necessary – very efficient parastatals.

The experience of the black economic empowerment programme demonstrates how this extractive economic system has seduced new black elites to become part of the closed patronage system. Very few BEE deals have really achieved what they set out to do – namely empower the many and not the few. If we could go back to the drawing board I would make employees the largest beneficiaries together with neighbouring communities as well as communities in labour sending areas that provide the mines with their manpower.

South Africa is also increasingly finding itself in a very difficult position that reflects all the symptoms of the Dutch Disease. The huge export revenues we enjoyed at the top of the resource super cycle pushed up our exchange rate and rendered our agriculture, textile and other industrial sectors increasingly uncompetitive. The failure of successive post-apartheid governments to invest in, and manage the creation of high quality education and training systems to enhance productivity, has led to a classical unsustainable economic base.

The shrinking economic cake alongside the rising tide of higher expectations that freedom would deliver better material conditions has raised the risk profile of the country. The tragic events in Marikana and protests by agricultural sector workers in the fruit and wine farms in De Doorns in the Western Cape are a wake-up call alerting South Africans to the many time bombs waiting to go off.

A turnaround is possible. It must start with difficult conversations between leaders of the government, mining industry, and worker representatives. The government must commit to creating an environment of: policy certainty, higher quality physical and social infrastructure, including education for the 21^st century, and transparent fair regulatory systems to enable investors to commit long-term resources. The adoption of the first ever National Development Plan by the government is a promising starting point. Success will depend on the implementation of the commitments made to focus more intently on fighting poverty and creating a more positive investment climate with appropriate incentives for both domestic and international investors.

The mining houses and the government must accept primary responsibility for addressing the legacy of the extractive industry mode of mining: the triple burden of silicosis, HIV/AIDS, acid mine drainage, dusty and uranium contaminated environments. Industry led Public/Private Partnership arrangements must be struck to enable comprehensive holistic solutions to emerge. Government must provide incentives for the mining industry to invest in clean up operations which would also provide alternative livelihoods and jobs for ex-mine workers and local communities. Investors would also have to refocus their mindsets away from the short-termism that has driven the extractive industry mode. There is an urgent need to re-align the time horizons of expectations of high returns with the unavoidable longer term horizons of the build up process of projects in this capital intensive industry.

Workers representatives and unions must shift their mindset from short-termism to focus more on sustainable livelihoods and higher productivity to enhance returns for everyone. A greater emphasis on demanding higher quality education and training as well as wellness for their members should be the primary focus. Unions have dropped the ball with respect of fighting for proper housing, promoting healthier families and conducive environments for work-life balance for workers. The distance that has developed between workers and their representatives is a key factor in the recent wildcat strikes and tragedies in the mining industry in South Africa. Union leaders are perceived to have become part of the elite with a focus on consumption and status for themselves.

What this requires is that companies continue to create shared value for communities, governments and other key stakeholders in the areas they operate, building on what has already been achieved.

This means that mining houses must:

§ Build on sustainable local economic development programmes

§ Enhance programs focused on the procurement of local goods and services and promote responsible supply chain management

§ Work with government to ensure community programmes align and support government development strategies

§ Develop sustainable community infrastructure and other projects in collaboration with local communities, government and other key stakeholders

§ Respect human rights

§ Monitor and optimise stakeholder engagement

Finally and perhaps most critically we will all have to accept the fact that the traditional way of mining in South Africa with its reliance on cheap, low-skilled and plentiful labour is over. It is not sustainable. The labour-intensive nature of South African mining has deterred investment and the longer government structures its regulations around this model the longer investors will stay away.

HOW DOES ONE ESCAPE THE TRAP AND BUILD THE FUTURE?

I would like to share Gunter Pauli’s ideas informed by his work in Colombia which can be adapted to any other country:

“This possible solution operates within the free market philosophy. However, the future relies on a fundamental change of the mining business model which evolves from a core business centered around a core competence, to a clustering of activities that exploits all available local resources, generating multiple benefits for the mining companies, its industrial partners, the local communities and even the environment. This clustered approach ensures that the Dutch Disease will not smite the commodity trading countries. On the contrary, the design of a new business model for mining ensures that the whole economy regains competitiveness, including the farming and (manufacturing) industries which have already faced a downturn.

Clustering of Mining, Agriculture and Manufacturing Industry

A shift in the business model for mining provides a chance to reverse this trend of deindustrialization in commodity exporting countries. In order to accelerate its effectiveness, it is ideally combined with a shift in taxation policies. As long as mining companies remain core businesses focussed on extracting more ounces from the Earth, and ship these out of the country at lower costs paying a fixed percentage as tax to the government on each unit exported, then there is no solution.

However, if we rethink the activities of the extractive industries and how these could be redirected to respond to both global and local demand, maintaining a focus on minerals, while ensuring an effective use of all opportunities made possible by the mining boom, then there is a future for agriculture and local industries. If the government were to recognize the tremendous potential of this multiplier effect, then a smart shift in taxation can steer mining towards the clustering of productive activities. Mining and the commodity trade will then turn into a catalyst of local economic development instead of being a cause of de-industrialization and rural poverty.

Mining and Basic Needs

Let us take a gold mine as a case in point. Just about every goldmine in the world needs water to process ore. Actually, most mines require water and seldom find abundance in their area of influence. The traditional response of the mining engineers has been to pump water from aquifers, to pipe water over long distances, or to install reverse osmosis facilities if there is salt water in close proximity. These are major

infrastructural adjustments, increasing both capital and operational expenses of the mine at a cost of water per cubic meter that the local population would never be able to afford.

Time to think different. While not all regions in the world can provide lasting solutions exactly like the one described below, most mining zones can undergo a major regeneration of native vegetation, or a reforestation in order to turn the hydrological cycles from excessive water consumption by mines and perceived drought and contamination of water to abundance of water for private, agricultural and industrial consumption. Since five to eight years will span the discovery of a commodity to mine and its commercial exploitation, there is enough time to reverse the water supply in the region using all available resources.

Convert Cost into Revenue

If we were only considering the regeneration of forests for the purpose of water, then this represents a cost. This still reduces capital and operational expenses of the mine, since water production and filtration by a natural forest remains cheaper than installing water catchment areas and water treatment systems. However in the business philosophy of the Blue Economy, we are not only interested in merely reducing expenses, we are keen on increasing revenues, not just for the company concerned, but for the local economy. A mining project in the Colombian Andes offers the opportunity to regenerate part of the bamboo forest that once reigned the region. Bamboo, especially giant bamboo (Guadua angustifolia) is well known for its capacity to regenerate water cycles, purifying contaminated water, while regenerating top soil and increasing rainfall since a bamboo cover of the land decreases the surface temperature and therefore increases precipitation.

FROM EXTRACTIVE TO INCLUSIVE MINING MODEL

My experience of growing up in a rural area, operating as an activist in a hostile environment of the apartheid regime and being a witness to, and participating in efforts to build a post-apartheid inclusive society, has taught me that almost every challenge can be turned into an opportunity for change. I have benefitted enormously from turning the hardships of my life journey into learning opportunities. The question for the mining industry today is how we are to turn the challenges we face into opportunities for creative fresh starts?

The mining industry in South Africa has no choice but to make a fresh start. Fortunately many are already working together to develop alternative models to tackle common problems such as the TB/Silica and HIV/AIDs Industry-led effort (The Chamber of Mines with Gold Fields, Anglo Ashanti, and some platinum companies taking the lead) supported by the National Department of Health and international development partners. But much more boldness is needed to develop the “clustering model” that Gunter Pauli refers to above.

Just imagine turning Rustenburg, in North West Province, into a modern mining town with a cluster of appropriate industries that form the supply chain of the platinum mines in the area. Imagine the human and intellectual capital that can be generated through the construction of both physical and social infrastructure to create a buzzing town housing all levels of employees working on neighbouring mines and industries. Imagine turning the ugly landscape of mining shafts into green spaces that provide agri-business jobs for locals and feeds the households in the area and beyond. Imagine the government, private sector and citizens working together in a transparent way to build a sustainable future together.

But legacy issues in labour sending areas have to also be addressed. Imagine the Eastern Cape and Kwa-Zulu Natal becoming the bread baskets of the mining industry as part of its supply chain for food and other agricultural inputs. Imagine the potential of clustering agri-businesses in these provinces and enhancing the country’s food security as well as its export potential. Gold Fields and Anglo Ashanti are putting together just such an experiment with a chicken value chain in the Eastern Cape. Imagine the growing social capital of rural areas that could follow the termination of the destructive migrant labour model that has damaged rural family life. Imagine the return of these provinces to proud producers of high quality school graduates feeding into a rejuvenated higher education and training system.

All this is possible, but it will take a willingness to take risks and engage in tough conversations between the government, private sector, workers and civil society. It is possible to leverage the mineral resource wealth into a catalyst for re-industrialization of our country, continent and other parts of the world. But we must heed Einstein’s words – we cannot solve today’s problems by using the same thinking that created them in the first instance. Are you ready for change?

SATELLITE SYSTEMS TO SLASH DIGITAL DIVIDE IN EUROPE

Many of us perceive Africa to be the forsaken land as far as digitization is concerned. While moves have been made to catch up with the rest of the world, many still have misconceptions about how far behind Africa lags in ICTs.

The following press release proves that Africa’s problems may not be as bad as many of us think but that there is hope we can catch up and overtake the western world if we set our minds to the task at hand. The many gaps in ICT and every other sector are opportunities for Africans to develop home made solutions while at  the same time creating employment and sustainable sources of income.

Turin, Paris, Luxembourg, 19 February 2013 -  Almost ten million households still have no access to broadband in the EU, according to the Digital Agenda for Europe scorecard. Although 95.7% of EU households are connected, only 78.4% in rural areas actually have access to broadband.

In order to tackle the digital divide, the European project SABER (SAtellite Broadband for European Regions) has been initiated to provide local and regional authorities with practical guidance on connecting residual user demand with public funds and quality satellite solutions.

Partially funded by the European Commission, with 510.000 euro, the SABER project is a Thematic Network on the "Contribution of satellite systems to 100% EU broadband coverage "in the frame of the “Competitiveness and Innovation Framework Programme-ICT Policy Support Programme” (CIP-ICT PSP).

Led by CSI Piemonte, the 24 month project involves 26 partners including Astrium, Eutelsat, SES Broadband Services and 21 regional authorities and ICT public and private organizations supporting regions in broadband deployment representing 13 countries. The project partners cover all the broadband value chain and have extended experience in publicly funded deployments.

The scope of the project is notably to create the conditions for the most efficient and effective contribution of satellite-based services to supporting the objectives set for the Digital Agenda for Europe and Europe 2020, including assistance in the use of 2007-2013 EU unspent funds.

This will result in the development of practical guidelines on the cost benefit analysis of satellite broadband, public aid, business models, funding options and solutions to non-technological roadblocks. These outcomes will be regularly disseminated across Europe through workshops, conferences and publications on the project website www.project-saber.eu.

The first SABER workshop is being held in Cork, on February 19th, upon the Irish presidency of the EU Council. Discussions between partners and external stakeholders, including the European association NEREUS, will aim at providing guidelines on satellite services procurement.

The activities will run in three consecutive streams: an early stream for European regions ready for deployment in the short term, a main stream to support regions in achieving the 2013 Digital Agenda objectives, and finally a future stream to support 2020 objectives.

“The SABER project – explains Davide Zappalà, President of CSI Piemonte – confirms CSI leading role in innovation, also in Europe, thanks to the experience acquired by employing satellite services and the regional development broadband program WI-PIE”.

“We are witnessing – continues Stefano de Capitani, CSI General Director – to an increasing awareness of the importance of the Digital Agenda at European and national level and thus to the actual intiatives aimed to allow a leap forward in the relationship between Public Administration and citizens and business through a fair use of modern technologies”. 

IFC bullish about Africa’s economic growth prospects

“The core message about the continent today is that Africa is rising.” That is the view of Bernard Sheahan, director of Infrastructure and Natural Resources for Africa and Latin America at the International Finance Corporation (IFC), speaking at the Investing African Mining Indaba™ in Cape Town. Sheahan points out that growth rates in Africa are well above the world average. Africa is expected to growth at 5.5% per annum over the next 5 years, above forecasts for world economic growth.

Investors and other interested parties increasingly cite political risk as a reason for caution when investing in Africa. Sheahan said that there are signs of improvement. “There is increased political stability, we’ve seen positive political transitions in countries like Guinea, Senegal, and Ivory Coast. This means better economic governance, it is not perfect in some countries, but there are improved policy choices which points to progress in investment climate reform. Underpinned by social transformation in Africa, the continent is about to see a demographic dividend. Its population is growing faster than other regions.”

Sheahan cited a recent McKinsey report on jobs and the labour force, which projected that within the next two decades, the labour force in Africa will be larger than those of China and India. Projections also point to rapid urbanisation, and by 2023 the majority of Africa’s population will be living in urban areas.

Sheahan believes that Africa’s mining sector has a huge potential and that a large part of this is due to relative under-investment and the growth seen in investment in exploration. The IFC has taken advantage of this, evidenced by the fact that “Africa accounts for more than half of the IFC’s mining investments.”

He believes that the main opportunities in Africa lie in infrastructure. Africa sits with a huge infrastructure deficit, which the IFC believes will need an annual investment of US $93 billion.

Sheahan believes that the mining industry can play a critical role in reducing the political risk to doing business in Africa through job creation and skills development. He said that “we need more cooperative approaches between companies and other stakeholders and this is where the mining industry can play a role.” He lauded the African Mineral Skills Initiative of the UN, in partnership with Anglogold Ashanti, which is playing a role in skills development on the continent.

In addition to skills and jobs, Sheahan said that local procurement is another area where industry can contribute to reducing risk. He emphasised that a holistic approach is needed to local sourcing.

Sheahan explained that over the last 10 years, the mining industry has made progress in reducing environmental risk, but “how do communities share in the benefits? Industry can create access to infrastructure, jobs, and economic opportunities and make an impact to communities.”

He cautioned, however, that companies must be strategic in community investments and make them a core part of the mine project planning process.

“There are rising opportunities and vast untapped resources in the infrastructure space in Africa”, said Sheahan. However, challenges also abound: there are a limited number of financial solutions available for African countries, and the bankability of mining-related transport assets is difficult to achieve. Sheahan emphasised the importance of the focus on infrastructure: “Africa’s infrastructure deficit is a potential bottleneck for mining development. Multi-user infrastructure can be an opportunity for mining to enhance the developmental impact of mining.” 

Ramphele calls for a mining industry for the 21^st century

Cape Town 06 February 2013

“These are difficult times to be in the mining industry”, said Goldfields Chairman and social activist Dr Mamphela Ramphele, addressing delegates at the Investing in African Mining Indaba™ in Cape Town.  Reflecting on the past year, she said: “At that time – during the 2012 Mining Indaba- the mining sector was already in the midst of the rising tide of resource nationalism and anti-mining sentiment. That sentiment has grown stronger world-wide.” She said that in South Africa particularly, the Marikana tragedy and other violent incidents of the past year are symptomatic of “conflicts over scarce resources in our social relationships.”

She lamented the fact that in many cases the benefits of high mineral resource prices have not benefited the majority of citizens. She cited some exceptions, particularly Peru and Norway. “The Norwegian model is as close to the ideal model as possible, where 40% of revenue –from the country’s resources - is used for government expenditure and the rest is used to develop other sectors in the economy.”

Ramphele proposed a completely different model for what she termed “the mining industry of the 21^st century,” for an industry that can be both “a catalyst and an engine of growth in both advanced and emerging economies.”

She said that the extractive mining models in most countries are being challenged on many fronts. “Extractive industry modes are by their nature unsustainable, given their failure to invest in innovation and creativity to enlarge the resource base and to allow new entrants to bring renewal to the industry.”

She said that it is “morally wrong” for economic and political elites to think that they can continue to benefit exclusively from mineral and natural resources, which is  bound to lead to civil conflict which is bad for everyone including business.”

She said that the industry needs to evolve to a “clustering of mining, agriculture and manufacturing using all available resources of the mine, from land to energy and waste like rock refuse and tailings.”

Ramphele said that the time for a simplistic business approach was over, that the interconnected nature of economics, social and political systems fuelled by rapid information technology knowledge and information dissemination makes it unsustainable.

She called for “modesty on the part of governments” in an effort “to minimise the risks of conflating governing party interests, government’s role as a regulator and the state as the custodian of inter-generational long-term interests of the society as a whole.”

 Ramphele urged the private sector to not only be accountable to shareholders, but to also take into account the “shared long-term interests of sustaining the industry in the challenging environment of the 21^st century.” She also urged business to speak out, saying: “Silence in the face of abuse of power on the part of governments tends to come back to haunt industry players.”

Labour also came in for criticism, with Ramphele urging workers and their representatives to adopt “a longer term view beyond annual wage increases.” She says labour unions should focus on being more productive and promoting innovation in order to guarantee sustainable and rewarding jobs.

Partnerships have been a major theme at the Mining Indaba, with most speakers, including Mineral Resources Minister Susan Shabangu and Anglo American Chief Executive Cynthia Carroll, focusing on the concept. Ramphele weighed in as well, saying that partnerships that benefit society, including future generations, need to be forged. 

Mark Cutifani endorses South Africa as a good investment destination

Cape Town 7 February 2013 - Incoming Anglo American CEO Mark Cutifani says the mining industry has failed to defend itself, notwithstanding the fact that it is the most important, significant and critical industry in the world. In a keynote titled Mining’s Contribution to Sustainable Development, at the Investing in African Mining Indaba™ in Cape Town, Cutifani said that the mining industry needs to change its attitude towards the local communities where it operates, and move from being a simply an “extractive industry to a developmental industry.” He spoke about the disconnect that exists between mining companies and local communities, when it comes to making a difference to the areas where the industry operates. “Doing good things in communities often does not cost a lot. People don’t necessarily want money – if you give just 10% of your time and skills and uplift the communities that is often enough”, said Cutifani.

He said that the industry has the advantage of being more important to the future of the world than any other industry, and this is a huge responsibility. He called on the industry to “stand up and be true to this responsibility and to promote itself.”

Cutifani said the industry operates on a version of Maslow’s hierarchy of needs, namely access to water, energy, food security and large tracts of land. This is the basis for a successful mining operation. “We need to change our attitude as an industry and provide access to tracts of land for communities. As an industry we have expertise that we can provide in areas like education and municipal services.” He also said that the industry is in a unique position to facilitate the entrance of other industries. The industry must aim for symbiotic relationships with communities and governments, “we must see it as part of parcel of what we do.”

He also addressed himself to governments, saying that they must put in place appropriate macro-economic policies, transparent regulation and ensure security of tenure.           “The industry is in the real estate business. If security of tenure is threatened, then you will destroy mining,” said Cutifani. He also raised the issue of corruption as a value destroyer, but stated that people often blame politicians for corruption, forgetting that it involves two parties. “Don’t blame politicians for corruption, as an industry we must also look at what we do.”

On the question of the future of mining on the African continent, Cutifani said that there needs to be a development of regional infrastructure hubs and population centres that focus on tourism, water and mining. “We need cooperation across country borders. We must find solutions to this and mining should be part of those conversations. It must be done by country or continent,” said Cutifani.

He lauded South Africa as a good place to do business. He challenged the media and industry to tell the real story of South Africa. “This country has defied the critics. The South African economy has grown every year since 1994,” said Cutifani. He drew parallels between South Africa and Australia – another resources-based economy. He said that the South African economy has grown at a compounding growth rate of 3.2% per year, while Australia’s rate has been 3.4%. “So South Africa is only 0.2% behind Australia, people make it seem worse”, said Cutifani. He said the press, South Africans and the mining industry dwell on the negative, and that South Africa has done better in building social infrastructure over the last 19 years than any other place on the planet.

He did, however point to the underperformance of the mining industry on the stock exchange, saying that the “All Share Index on the JSE is up 60% since 2007, while the mining index has remained flat and is actually down 30% in real terms in the last 6 years.” He said mining industry leaders need to change that. “Industry and government leaders must stop shouting at each other. We must put our differences aside and start talking in a way that will change the industry for good. The threats to take away mining licences are out of order. Let’s hope that we have learnt our lessons and engage in consultation,” said Cutifani.

2013 Mining Indaba™ registers a 10% growth on the number of attendees

Johannesburg 11 February 2013 – A record 7 700 delegates attended the 2013 Mining Indaba, from 100 countries and 6 continents, last year the conference was attended by 7000 people. There was a distinct African flavour at this year’s indaba with 57% of delegates being from the continent, 5% from Asia, 18 and 12% from Europe and Australia respectively and the rest from the Americas, truly living up to its description: ‘This is where the world connects with African Mining.’

This year there has been a marked increase from Asian delegates, which has increased from 3% of the total number of delegates in 2012 to 5% in 2013. The greater majority of the Asian contingent was mainly from China and Japan. This year the Chinese delegation numbered 104 including government officials. 

The Mining Indaba is the world’s largest gathering of the most influential stakeholders in African mining. They include financiers, investors, mining professionals and government officials. Government representation at the mining indaba was also predominantly African, with 36 African governments in attendance.

The conference is a platform for connecting with investors and key decision-makers in an atmosphere created for doing business and for reflecting on the industry-wide challenges and opportunities. Maria Palombini, Marketing Director, Mining Indaba LLC said: “We provide the platform for investing in African mining, the industry chooses the messaging.” The messaging this year was distinctly about sustainability, with a vast number of presentations focusing on this theme. “It is significant that global investors want to see and hear more on this topic”, said Palombini.     

 The CEO of the Cape Town International Convention Centre (CTICC), Rashid Toefy said: “The CTICC is proud to be the host of Mining Indaba in its tenth year at the centre. The successful partnership between the Mining Indaba LLC and the CTICC has resulted in a winning formula, which has grown this event in stature. This is evident in the growth we’ve seen in the number of attendees. Mining Indaba is a key driver of economic growth in the province and this year’s event resulted in an economic spinoff for the region of just over R 111 million and contributed to the creation of over 700 direct and indirect jobs in South Africa.

Not only is it making a significant contribution towards the CTICC’s mission of raising the profile of Cape Town and the Western Cape as a premier global events destination, but it is helping to transform and develop the meetings and business events landscape across the country.

Toefy’s sentiments echoed the statements made by the Mayor of the City of Cape Town, Patricia De Lille who said: “Over the past 5 years, R336 million has been injected into the City of Cape Town due to the Mining Indaba, 3000 direct and indirect jobs have been created along with 20 000 hotel room nights for the City.”

“It was a rush.” “Impressive.” “It’s an extraordinary conference.” These are just some of the terms used by attendees and media representatives to describe the 19^th Investing in African Mining Indaba™ at the Cape Town International Convention Centre. “I’ve been attending the Mining Indaba for 3 years now and it just keeps getting better,” said Chris Bishop, Managing Editor of Forbes Africa.

Mineweb’s Geoff Candy said: “The challenges took centre stage. Challenges that present foreign investors are with a clear choice: to stay the course, or to go, quickly.”

Tim Cohen of Business Day said: “The mining indaba is an amazing symbol of the increasing importance of mining on the African continent. Governments are encouraging the industry and the social aspects are being dealt with.”

Gunther Deutsch of the South African Broadcasting Corporation said: “There is a sense that mining leadership is taking sustainability seriously,” whilst Andrew Moody of China Daily said: “It was my first time at Indaba and I found the scale of it very impressive. It was possible to do a wide range of interviews from industry experts, African leaders and Chinese businesses.”

Delegates also lauded the organisation of the Mining Indaba, calling the conference efficient and the content of great quality.

Moyo challenges Chinese notion of African recolonisation

Cape Town 6 February 2013 - “China’s campaign and race for resources globally is systematic and deliberate. Not since the era of colonialism have we seen a campaign on such a scale,” says Dr Dambisa Moyo. She delivered a keynote address at the Investing in African Mining Indaba ™, under the theme: Winner Takes All: China’s Race for Resources and What It Means for the World.

Moyo challenged those who claim that China’s investment in Africa is a new form of colonialism to invest in the opportunities that abound in Africa today. “If you’re concerned about Africa being recolonised by China, then put your money where your mouth is.” She said that concerns from the West about neo-colonialism, environmental degradation are exaggerated or just plain wrong. She did, however, add a note of caution to be “vigilant and ensure that they gain something from their engagement with the Chinese.” She said that African governments must articulate their policies clearly investor.

She pointed out double-standards, saying that China is the biggest foreign lender to the United States today, yet “no-one complains about human rights violations, but when it comes to Africa there are claims of re-colonisation.”

Moyo described China’s approach to investing in Africa as a symbiotic relationship, with China offering host nations what they need. She pointed to the vast financial resources at China’s disposal, saying that China’s “deep pockets mean that they can go where others like the US and Europe cannot go.

“People question China’s ability to value an asset, they should ask why they are willing to pay a premium for an asset. The answer lies in the utility model.”  She said China is simply interested in ensuring that they secure the natural resources, so they will pay what they must. “As competitors fall away, China will have less competition and will end up paying less for resources.”

She ccontends that China has become a monopolist in some areas of the commodities market, including copper and coal.

Moyo remarks that the world is nowhere near the end of the commodities super cycle. She expects significant price increases for the foreseeable future as well as volatility in commodity markets. This will be driven by factor like population growth, a growing middle class in emerging markets and urbanisation policies in developing countries.

She pointed to some supply-side constraints though; citing land, water shortages and energy constraints, and further added that it is becoming harder to access minerals due to difficult terrain and political tensions: “There has been an increase in conflicts around the world due to resource constraints. Since 1995, there have been 25 commodity-based conflicts around the world.” She said future conflicts would revolve largely around water resources, but that minerals and energy would also generate their fair share of conflict around the world.

Moyo also spoke of an increase in natural resource nationalisation citing the examples of Mongolia, the Dominican Republic, Argentina and Australia. She said: “Governments are taking on more responsibility for mineral resources.”

She cautioned governments who are embarking on this path to be careful, citing difficulties that may arise, such as difficulties in raising capital due to uncertainties that are created by policy changes by governments, particularly in the mining sector, which is a long-term investment sector.

Moyo was named by TIME Magazine as one of the “100 Most Influential People in the World” in 2009. She was also named as one of the World Economic Forum’s Young Global Leaders. She is best known for her New York Times bestsellers “Dead Aid: Why Aid is Not Working” and “How there is a Better Way for Africa.”