Ambassador Muchanga: ‘Africa’s mineral wealth remains key driver of its transformation’

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Ambassador Albert Muchanga African Union Commissioner For Trade And Industry
Ambassador Albert Muchanga African Union Commissioner For Trade And Industry

Ambassador Albert Muchanga, Commissioner of African Union for Economic Development, Trade, Tourism, Industry and Minerals has stated that Africa’s vast mineral wealth remains an important driver for the continent’s structural transformation.

This, he added was enshrined in Agenda 2063, as it represented 30 per cent of the mineral deposits in the world.

He said Africa’s exports of oil, gas and minerals account for 70 per cent of their exports and 50 per cent of their revenue.

Ambassador Muchanga stated this during the Launch of the African Minerals Development Centre (AMDC) Phase II and the Second Forum on Mining, taking place at the African Union Headquarters, in Addis-Ababa, Ethiopia.

He said the mineral wealth positioned 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.

“And there are major threats that may hinder Member States’ abilities to fully reap the benefits of the mineral wealth endowment”.

He said for a start, Africa had a disproportionate dependence on extractives exports, which waas major vulnerability as it exposed the continent to the boom and bust cycles associated with commodity prices as well as illicit financial flows. The illicit financial flows from Africa now hover around US$90 billion annually.

Africa hosts 6 per cent of global reserves of copper, 53 per cent of cobalt, 25 per cent of bauxite, 21 per cent of graphite, 46 per cent of manganese, 35 per cent of chromite, 79 per cent of phosphate rock, 91per cent of platinum group metals.

“We can add to the foregoing: hydrogen, water, wind and solar power.

“When one looks at production, Africa accounts for a greater share of current production of many of these minerals, including 70 per cent of cobalt. Lithium is mined in Zimbabwe and Mali, while Namibia, Ghana and the DRC also have them. Rare Earth Elements (REEs) are mined in Angola and Burundi as well.

Mr Muchanga said Africa was part of the global value-chains for green minerals; however, that role was concentrated at the first phase of the value chain, exploration and extraction.

“The task ahead is to move towards value addition and the Africa Commodity Strategy will assist in this regard.

“In line with our commitment towards the green transition, the Department of Economic Development, Trade, Tourism, Industry and Minerals (ETTIM) will organize a side event on the margins of COP27 in Sharm El Sheikh, Egypt next month under the theme: “Decarbonizing African Industry”.

“I also invite you all to the AU Summit on Industrialization and Economic Diversification to be held in Niamey, Niger from 20-25 November, 2022”.

On mining, he said there was urgency to ensure that the roadmap envisioned in the Africa Mining Vision with a central theme of “Transparent, equitable and optimal exploitation of mineral resources to underpin broad-based sustainable growth and socio-economic development” was implemented effectively and fully.

“This is because AMV is a continental vision for managing the continent’s mineral resources for the benefit of Africans.

“In this vision, minerals are considered a key driver of industrialization and transformation of our economic structures. These are critical to the continent’s long-term inclusive growth and sustainable development.

He said the African Minerals Development Centre (AMDC) was established as the specialized agency of the African Union to implement the African Mining Vision (AMV) as well as the minerals segment of the Africa Commodity Strategy.

The first phase of the AMDC was launched in 2013 as a five-year flagship project housed in the United Nations Economic Commission for Africa (UNECA). As a project, it provided strategic support and coordination for the implementation of the AMV and its Action Plan adopted in 2009.

In 2018, the Assembly of the African Union Heads of State and Government decided that the Republic of Guinea would host the African Minerals Development Centre as a specialized agency of the African Union.

In February 2019, the AMDC was officially handed over to the African Union by the United Nations Economic Commission for Africa to start the process of transferring it to Conakry, Guinea as a specialized agency of the Union.

The Host Agreement between the African Union and the Government of the Republic of Guinea was signed in 2021.

Since May 2022, the AMDC is being supported through the ACP-EU Development Minerals Programme (Phase II), initiated by the Secretariat of the Organization for African, Caribbean and Pacific States (OACPS) and we are most grateful for this support.

Financing came from the European Commission with UNDP as the implementing agency.

As highlighted in the AMDC Business Plan, the AMV’s value proposition of exploiting minerals for sustainable development throughout the value chain calls for a major shift in the conceptual methods and institutional arrangements adopted to-date regarding the minerals sector.

In the envisaged changes, greater importance is given to improving internal governance, building capacities, capturing the more lucrative links in the value chain such as manufacturing and the related support services such as research and development which is critical to boosting innovation in the mineral value chain.

He called on all of you to accelerate the signing and ratifications of the AMV Statutes to enable the AMDC to become a full-fledged Specialized Agency of the AU.

He also called for regional and continental value chains, to develop reliable and resilient supply chains within the African Continental Free Trade Area, using the lever of intra-African trade in finished and intermediate goods.

“Second, Africa will have to reposition herself as a reliable supply base to the rest of the world, not in the historical mode of supplier of basic raw materials but supplier of either finished or intermediate goods that place Africa higher in the global value chains.

“Minerals, and in particular, the AMDC, will play critical roles in both cases.

“As we do so, let us also recall that some regions of the world have come up with the concept of Critical Raw Materials. These are raw materials they will always require to make their industries run. Let us engage these countries to agree on how we can mutually benefit from international trade in minerals”.

He said the overall goal of the African Forum on Mining was to defined as a strategic way forward for minerals development that would contribute to the energy transition, and hoped that the Forum will come up with actions required to transition the mineral industries across Africa towards net zero emissions of carbon dioxide and digitalization.

“Achieving that will strategically position the African continent in the global energy transition. In this connection, I applaud the initiative of the Democratic Republic of Congo and Zambia to jointly develop electric car batteries. We encourage other African countries to also promote the development of regional and continental value chains to position the African Continental Free Trade Area increase intra-African trade flows.

“It is also my expectation that the Forum will galvanize efforts towards enhanced domestication of the Africa Mining Vision with its core thematic areas. In this connection, I invite you all to come up with practical measures on how the continent can optimize benefits from the minerals sector through realignment of policies, legal and regulatory frameworks, taking into consideration new imperatives such as de-carbonization”.

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