Indaba to focus Africa's resource benefits

HARARE - The growing concern of how Africa can benefit from its vast mineral resources is put under spotlight at the forthcoming mining indaba, as the continent seeks a bigger profit share from the lucrative resources business.

Zimbabwe is expected to host the indaba on September 12 with regional mining experts and executives expected to share ideas on how Africa can fully unlock its minerals’ value.

“Issues to be discussed include developing strategies that will make the mining sector contribute to stopping Africa from being an impoverished continent as well as sharing ideas and paving the way for collaborative strategy for mining in the region,” said Sheila Galloway, chief executive of Utho Capital — organisers of the event.

Zimbabwe — a key African mining destination — hosts the event annually with this year’s theme being “Improving Mining through Continuous Dialogue, Infrastructure and Finance.”

The southern African nation holds the second-largest known platinum reserves in the world after South Africa while its diamond industry contributes approximately 25 percent on the global diamond market.
Among the key guests will be Blackie Morale former chief executive of Debswana — one of the top diamond producers in the world.

Galloway also added that “the conference also seeks to position Zimbabwe as a powerhouse in the mining sector and an infrastructure hub.”

Last year’s indaba attracted over 500 delegates regionally and internationally. This comes as more African governments are pushing for increased participation in their mining sector.

Zimbabwe, in particular, is currently implementing an indigenisation programme which requires all foreign-owned companies to cede at least 51 percent shareholding to black locals.  

Anglo American Platinum, Impala Platinum and RioTinto are among the top global resources groups which operate in the country.

The country’s mining sector contributes approximately 13 percent to the nominal GDP, about 50 percent  to the nation’s total exports, 12 percent to fiscal revenue, 45 000 workers to national employment and more than 50 percent of foreign direct investment. Its mineral exports rose by 138 percent in 2010, grew 38,7 percent in 2011 and is projected to increase by 13,3 percent this year.

“In terms of earnings, minerals exports surged in 2011 to $2,45 billion from $1,6 billion in 2010 driven mainly by increased platinum, gold and diamond production buoyed by booming international prices,” Mines minister Obert Mpofu has said.

To unlock value, the government has also been pushing miners to process minerals locally.

“The mining sector used to contribute US$54 million into Treasury from diamonds but can no longer do so because we are not processing them locally. We are now contributing about half of the amount. Those who imposed sanction on us are benefitting more,” Mpofu said.

The government has increased mining fees by up to 5 000 percent in a bid to increase state revenues.

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