Tullow Oil and The Metals Company nonexecutive director Sheila Khama, during her keynote address at the 2022 Council for Geoscience Summit on Wednesday, commented on her unease with the phrase ‘Africa is very rich in minerals’.
She described it as a “dangerous statement” that perpetuated the idea that Africa did not have to compete with the rest of the world for mineral exploration investment.
“While Africa is rich in certain minerals, Africa is not rich in all minerals.” Moreover, other countries on other continents also have these minerals and have fewer drawbacks, in terms of political stability, legislative certainty and ease of doing business.
However, she stressed that the more people repeated the phrase, “the more we give the sense that the investors coming onto our shores need us more than we need them.”
And yet, over the last 20 years, the African share of exploration expenditure has declined significantly from what it was. Further, Khama noted that the vast majority of this spend had instead been reallocated to countries and regions where the environment, from an investment policy perspective, was considered more conducive.
“If you look at the perception of Africa's mineral endowment, and the level of the exploration budgets, African countries underperform, not relative to other countries, but to its potential.”
She noted that Africa should, at the least, be attracting the same level of exploration spend as it had in previous years. “We should be seeing a spike now that there is a greater demand for minerals for transition to clean energy. But, believe it or not, when looking at Africa's capacity to attract investment, the trend is downward.”
Khama also cited a PWC report on exploration expenditure, commenting that even a country as well-endowed as the Democratic Republic of the Congo, had in the last two years seen a drop in expenditure, owing to a perception of risk caused by political instability.
She implored the African geoscientific community to advocate for policies that complement mineral endowment – ones that were not indifferent to market trends, but that helped create an environment that attracted finance and appetite to fund exploration, scientific research, and project development.