Feature - Featured - October 4, 2022

AU launches AMDC Phase II, hosts 2nd African Forum on Mining  

The 2nd African Forum on Mining (AFM2022) commenced on Monday, in Addis Ababa, Ethiopia, which also marks the launch of the second phase of the African Minerals Development Centre (AMDC).


AMDC is the AU’s specialized agency mandated to provide strategic operational support and coordination for the implementation of the African Mining Vision (AMV) and its Action Plan as well as the minerals segment of the Africa Commodity Strategy (ACS); AMV’s long-term strategy is leveraging Africa’s natural resources sector to bring about the continent’s socioeconomic development.

Themed: “The Africa Mining Vision in the Time of Green Energy Transition and Digitalization: Challenges and Opportunities”, AFM2022 was held October 3 – 4 while the first-ever African Forum on Mining (which coincided with the tenth anniversary of the AMV) was held in November 2019 at Accra, Ghana under the theme: “Africa Mining Vision At 10: Looking Back, Moving Forward?”

While speaking at the opening ceremony, Amb Albert Muchanga, the AU commissioner for economic development, trade, industry and mining, said Africa’s vast mineral wealth (which represents 30% of the world’s mineral deposits) should be an important driver for the continent’s structural transformation, as enshrined in Agenda 2063, noting that African countries’ oil, gas and minerals’ export account for 70% and 50% of their exports and revenue, respectively.

“This mineral wealth positions Africa to play a central role in the energy transition agenda in the dangerous era of climate change. However, despite the enormous potential of the continent’s mineral industry, most African countries have historically been unable to fully benefit from their natural wealth as we have remained producers and exporters of mineral raw materials, a low rank in the global value chain,” Muchanga decried.

The AU chief described Africa’s high dependence on extractive exports as a major vulnerability that exposes the continent to the boom-and-bust cycles associated with commodity prices as well as Illicit Financial Flows (IFFs), adding that IFFs from Africa hover around US$90 billion annually. Thus, he said the AMV’s mission was “managing Africa’s mineral resources for the benefit of Africans” while AMDC Phase II seeks “to reenergize the AMDC stakeholders towards creating a greater momentum for the implementation of the AMV.”

“Significant quantities of the minerals needed for the energy transition and green industries are also found in Africa. Africa hosts 6% of global reserves of copper, 53% of cobalt, 25% of bauxite, 21% of graphite, 46% of manganese, 35% of chromite, 79% of phosphate rock, 91% of platinum group metals. We can add to the foregoing: hydrogen, water, wind and solar power,” said Muchanga.

Antonio Pedro, acting executive secretary of the Economic Commission for Africa (ECA), said the adoption of the AMV in 2009 by AU Heads of States and Government was part of initiatives aimed at boosting mining’s linkages with the broader economy, noting that the launch of AMDC Phase II seeks to change the current narrative by facilitating a vibrant resource-based industrialization on the continent to create Africa’s prosperity.

Pedro said it was no secret that Africa was home to huge natural resources, i.e arable land, rivers and water bodies, solar and biothermal potential as well as vast reserves of oil and gas, quoting, Mining Contribution Index which confirms 10 out of the earth’s top 15 mining countries were in Africa, just as he said, some estimates put a third of global mineral reserves in the continent.

“Yet the majority of our countries still export mainly raw or unprocessed commodities. Two-thirds of the continent’s exports, on average, are in raw and un-processed goods. For almost half of our countries, 10 per cent of output and half of exports come from extractive sectors based on low value-addition. We know what the effects of this are – vulnerability to commodity price swings, limited capture of revenues from mineral-based products, and so forth,” the ECA chief bemoaned.

To this end, Pedro said the launch of AMDC Phase II represents a paradigm shift in Africa’s mining sector, one in which mining does not operate in a silo, rather as a catalyst for diversification and industrialization. He advocated for collaborations between governments, businesses, labour groups, communities, and financiers to operationalize the AMDC and outline a new approach to industrial policy for mineral value-addition.

“To break the enclave nature of mining, local content policies must have an expanded definition to mean high-value goods and high-level employment, to ensure local ownership of suppliers and links with other sectors. Strong local content policies can lead to a three-fold increase in non-mining economic activity. Local content policies must also be backed by support for local suppliers to develop skills and capacities,” the UN chief said.

Marit Kitaw, AMDC’s interim director, described AMV as Africa’s response to the paradox of great mineral wealth amidst pervasive poverty, by bringing about inclusive growth and sustainable development of African economies. The AMV’s implementation tools are the Country Mining Vision (CMV) Guidebook; AMV-Private Sector Compact; The Africa Minerals Governance Framework (AMGF); Africa Minerals and Energy Classification Framework (AMREC); and African Commodities Strategy (ACS).

The 2nd AFM sought to galvanize efforts for the domestication of the AMV, emphasizing the optimization of the benefits of the mining sector through realignment of legal and regulatory frameworks; Establishing a continental compact between governments and Africa’s private sector, academia, and civil society to bring about desired and aligned policy decisions, investment financing, institutional and human capital dedicated to boosting Africa’s mining industry; as well as the Development of a Pan-African Minerals Database and African Green Minerals Observatory.

The AMDC Phase I was launched in 2013 as a five-year flagship project under ECA while AMDC’s Statute was adopted by the 26th Ordinary Session of the AU Assembly in 2016. As of October 2022, while 8 member states have signed it (Chad, Comoros, Ghana, Mauritania, Sahrawi Arab Democratic Republic, Sierra Leone, Sudan, and Togo) only 3 (Guinea, Mali and Zambia) have ratified it. 15 ratifications are the minimum required for the Statute to come into force and the AMDC’s full operationalization. For Africa to realize the objectives of the AMV and AMDC, member states need to scale up and expedite the ratification process.

 

 

 

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