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International assistance to benefit African mineral resources sectors

14th February 2014

By: Keith Campbell

Creamer Media Senior Deputy Editor

  

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Mozambique and Malawi have expressed interest in a World Bank plan to launch, in July, a five-year $1-billion fund to finance the mapping of Africa’s mineral resources. The project will use airborne surveys and satellites to cover areas for which there are currently no adequate geological maps. The hope is to reveal as much as $1-trillion in new mineral resources across the continent.

The World Bank has committed $200-million of its own money to the fund and is negotiating with other organisations – including governments and mining companies – to contribute. Malawi and Mozambique have indicated that they are interested in assisting with the geological mapping. The current lack of such data hampers both mining companies seeking resources and willing to invest and governments seeking the best possible deals for granting access to those resources.

“Times are tough, so the mining companies are counting their pennies, but there is a lot of interest because it is exactly when commodity prices are low and companies are reducing their investment budgets that having the information to guide their priorities is valuable,” World Bank mining unit senior manager Paulo de Sa told the Reuters news agency recently. As for African governments, he said: “If they know what they have in their territory, they are in a better position to fine-tune and calibrate the fiscal regime and mining laws.”

As an example, he cited Mozambique and the Moatize coal reserves. The country’s government had little idea of the scale of the deposits in the Moatize coal basin until Brazilian mining major Vale started its exploration work after acquiring the Moatize mine concession.

The intent is to start with eastern and southern Africa. An early target is to locate copper resources in Zambia. “There is a lot more copper in Zambia than what is known, so we hope to identify the areas with more prospectivity and then the government will be able to attract more investment to areas because they know there will be a lot more certainty [and] a lot less risk,” he stated.

The intent is that the gathered data will be collated and placed on a single, digital, platform that will be open to the public. The data could also be useful in planning the allocation of water resources or for the development of infrastructure.

Separately, Canada announced support for new projects to strengthen the Tanzania and Mozambique governments’ management of their natural resources. The aim is to achieve long-term sustainable development, benefiting their peoples.

In Tanzania, the Canadian government will provide C$15.5-million over five years in a joint project with the World Bank to strengthen the capacity of the government in Dar-es-Salaam to develop the country’s energy sector. It will also help the government to develop public–private partnerships to generate power and so stimulate growth and development.

In Mozambique, Canada will provide Can$18.5-million over six years to fund skills training centres of excellence in Tete and Cabo Delgado provinces, to train up to 4 000 Mozambicans for skilled jobs in the mining (Tete) and hydrocarbons (Cabo Delgado) sectors. In addition, Can$200 000 will be given to Mozambique’s Ministry of Mineral Resources to help develop a national corporate social responsibility policy for the mining and hydrocarbons industries.

Ottawa has also launched a new programme, aimed at multicountry mining and oil and gas projects in Africa. This is the Extractives Cooperation for Enhanced Economic Development programme, which will have, at first, a budget of up to Can$25-million a year. It will include strategic partnerships with Canadian and international institutions and technical assistance.

“Sustainable, private-sector-led economic growth and poverty reduction are two sides of the same coin,” highlighted Canadian International Development Minister Christian Paradis in Cape Town last week. “That is why Canada is supporting African governments as they look to manage their extractive sector more transparently and responsibly. We are ensuring communities draw the greatest benefit from the development of their natural resources to create prosperity and growth across the African continent.”

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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