The key to the Africa Mining Vision (AMV) achieving its goals is to bring processing to the source of mineral production, says African Union Commission senior industry adviser Frank Mugyenyi, noting that this amounts to establishing new industries in African countries that are exporting raw material.
He says African countries should stop exporting their mineral resources as commodities and importing finished products that could otherwise be competitively produced in Africa.
“Mineral commodities should feed into needed industrialisation. They should be processed and value-add should take place on the continent to create jobs for the growing youth population,” Mugyenyi notes.
Mining and metals company AB Minerals CEO Frank Balestra enthuses that this is attainable and that the company’s coltan processing technology will further the achievement of this goal. AB Minerals, he notes, is an international company which will have subsidiaries in countries where its plants are set up.
He states that Africa’s coltan is currently shipped mainly to Chinese and a few European smelters for processing and upgrading to tantalum and niobium finished products.
“About 12 African countries host coltan, a tantalite-element-bearing mineral resource,” says Balestra.
All 55 African countries are committed to the implementation of the AMV and have mineral resources in one form or another, Mugyenyi adds.
“Those who don’t have high-value minerals still have industrial and construction minerals, sand, clay and gemstones, with such operations employing a great number of Africans, especially artisanal and small-scale miners.”
It is the availability, however, of AB Minerals’ coltan processing technology, Balestra elaborates, that will allow Africa’s coltan-hosting countries to export the commodity as high-value finished products.
Constructing processing plants near the source of the minerals will eliminate the need to export raw tantalite-bearing concentrates at the lowest end of the value chain.
“There is a significant value differential created, leading to greater revenue for government, higher-paying jobs for the community – especially the growing youth population – as well as better pay for miners by dealing directly with the smelter.”
It is expected that AB Minerals’ processing plants will be in operation in Africa within the year.
In the case of tantalum, which is an upgraded form of coltan, Balestra notes the mining industry has started seeing higher commodity prices. If commodity prices remained low for an extended period, coltan miners would lose the incentive to continue to produce the mineral.
“While the price paid to the miners has not changed significantly at this point, the price of finished tantalum is increasing,” he adds.
Since early May, the prices of tantalum pentoxide and tantalum metal bar have been firming up after languishing at relatively low levels since their peak in 2015, says business development firm Titan business development VP Kevin Kirby.
“Despite the currently challenging commodity price of coltan or tantalum, AB Minerals’ process is extremely profitable at these levels, owing to very low costs associated with the process,” Balestra explains.
He adds that miners can negotiate and sell directly to smelters and get better prices for their coltan production.
“We will then upgrade and sell our tantalum and niobium to various industries that consume these products, such as the alloys industry, which is the fastest-growing segment of the tantalum industry.”
Additionally, he says, this processing technology can profitably process lower-grade concentrates, which have until now been considered waste materials.
“AB Minerals will not be selling its technology to other companies, but will be operating all plants throughout the world,” Balestra adds.
Further, AB Minerals’ coltan processing technology does not use hydrofluoric acid, as with the present method.
“We designed the plants to operate like microbreweries that do not use dangerous chemicals. It is a low power solution able to operate without major electricity demands. We can immediately convert to generators when power is not being supplied from the grid.
“It is an environment-friendly solution. We expect to finalise the planning of our initial plant or plants over the coming couple of months,” Balestra concludes, noting that AB Minerals will be in Africa for a significant part of July and August to finalise negotiations for the implementation of its first plant in Africa.
AB Minerals will, in the coming couple of months be able to provide further information regarding its processing technology, including naming the first country or countries to adopt the technology.
The Resources Curse Paradox
The AMV is a framework which aims to optimise the exploitation of Africa’s abundant resources to underpin broad-based social and economic structural transformation of African economies, states Mugyenyi.
The vision, he explains, calls on African countries to add value to the mineral resources in Africa and to take advantage of backward and forward linkages in pursuit of social and economic structural transformation that will lead to inclusive growth and sustainable development.
“It is acknowledged that the transformative role of the minerals sector can contribute to inclusive growth and sustainable development and can create jobs, and that economic returns would be higher if the minerals were processed on the continent.”
This realisation, Mugyenyi notes, led to the AMV as almost all African countries were “not benefiting from their abundant natural resources”.
Instead, he notes that not obtaining the maximium benefit from natural resources has contributed to conflicts over the small benefits that were nonetheless available, giving rise to what development economists have long dubbed the ‘Resource Curse’.
Therefore, the beneficiation of these resources on the continent has been highlighted as the solution to Africa’s woes.