Berliner Boersenzeitung - Will Africa's metals boom suffer the same curse as oil?

EUR -
AED 4.28433
AFN 80.750534
ALL 97.456108
AMD 448.076257
ANG 2.087576
AOA 1069.624325
ARS 1491.806663
AUD 1.781558
AWG 2.100174
AZN 1.987156
BAM 1.950723
BBD 2.355171
BDT 141.142668
BGN 1.95441
BHD 0.439751
BIF 3371.592727
BMD 1.166439
BND 1.493925
BOB 8.089017
BRL 6.50092
BSD 1.166464
BTN 100.221028
BWP 15.563628
BYN 3.817398
BYR 22862.209806
BZD 2.343122
CAD 1.598623
CDF 3366.344096
CHF 0.930958
CLF 0.029439
CLP 1129.665265
CNY 8.360162
CNH 8.365749
COP 4678.587935
CRC 588.772733
CUC 1.166439
CUP 30.910641
CVE 110.811442
CZK 24.678943
DJF 207.299725
DKK 7.46387
DOP 70.329186
DZD 151.420431
EGP 57.688241
ERN 17.496589
ETB 159.666793
FJD 2.623614
FKP 0.862062
GBP 0.868356
GEL 3.161155
GGP 0.862062
GHS 12.122978
GIP 0.862062
GMD 83.397702
GNF 10096.69833
GTQ 8.960679
GYD 243.947205
HKD 9.156496
HNL 30.735461
HRK 7.53601
HTG 153.101545
HUF 399.961512
IDR 18983.68257
ILS 3.910143
IMP 0.862062
INR 100.3125
IQD 1528.035451
IRR 49121.67341
ISK 142.399108
JEP 0.862062
JMD 186.872053
JOD 0.826958
JPY 172.299408
KES 151.056106
KGS 102.001152
KHR 4690.252436
KMF 492.528911
KPW 1049.795538
KRW 1612.99875
KWD 0.356394
KYD 0.972078
KZT 612.092243
LAK 25119.269841
LBP 104454.637468
LKR 350.956616
LRD 234.454498
LSL 20.902345
LTL 3.444192
LVL 0.705567
LYD 6.292921
MAD 10.500873
MDL 19.759744
MGA 5167.326179
MKD 61.45538
MMK 2449.521793
MNT 4180.757141
MOP 9.431535
MRU 46.30903
MUR 53.015073
MVR 17.97086
MWK 2025.515401
MXN 21.84301
MYR 4.96028
MZN 74.605452
NAD 20.901934
NGN 1780.733183
NIO 42.866693
NOK 11.832914
NPR 160.354044
NZD 1.952363
OMR 0.448512
PAB 1.166474
PEN 4.136778
PGK 4.811489
PHP 66.092716
PKR 331.706188
PLN 4.255812
PYG 9036.482044
QAR 4.24654
RON 5.078093
RSD 117.161872
RUB 91.094653
RWF 1672.673921
SAR 4.37482
SBD 9.712342
SCR 16.795014
SDG 700.43179
SEK 11.215378
SGD 1.495638
SHP 0.916638
SLE 26.262838
SLL 24459.652997
SOS 666.619652
SRD 43.397961
STD 24142.937977
SVC 10.206437
SYP 15166.02623
SZL 20.902252
THB 37.897422
TJS 11.262186
TMT 4.094202
TND 3.386152
TOP 2.731917
TRY 46.871426
TTD 7.917462
TWD 34.260678
TZS 3023.237929
UAH 48.780627
UGX 4180.120999
USD 1.166439
UYU 47.406622
UZS 14761.289259
VES 133.28729
VND 30473.22608
VUV 139.561149
WST 3.039166
XAF 654.259861
XAG 0.03044
XAU 0.000348
XCD 3.152361
XDR 0.81363
XOF 653.791259
XPF 119.331742
YER 282.103061
ZAR 20.88828
ZMK 10499.330322
ZMW 27.061802
ZWL 375.592971
  • CMSC

    0.0900

    22.314

    +0.4%

  • CMSD

    0.0250

    22.285

    +0.11%

  • RBGPF

    0.0000

    69.04

    0%

  • SCS

    0.0400

    10.74

    +0.37%

  • RELX

    0.0300

    53

    +0.06%

  • RIO

    -0.1400

    59.33

    -0.24%

  • GSK

    0.1300

    41.45

    +0.31%

  • NGG

    0.2700

    71.48

    +0.38%

  • BP

    0.1750

    30.4

    +0.58%

  • BTI

    0.7150

    48.215

    +1.48%

  • BCC

    0.7900

    91.02

    +0.87%

  • JRI

    0.0200

    13.13

    +0.15%

  • VOD

    0.0100

    9.85

    +0.1%

  • BCE

    -0.0600

    22.445

    -0.27%

  • RYCEF

    0.1000

    12

    +0.83%

  • AZN

    -0.1200

    73.71

    -0.16%

Will Africa's metals boom suffer the same curse as oil?
Will Africa's metals boom suffer the same curse as oil? / Photo: STEEVE JORDAN - AFP/File

Will Africa's metals boom suffer the same curse as oil?

Mechanical diggers are hard at work in the bleak landscape of the Moanda open-cast mine in Gabon, using giant jaws to rip out manganese and then dump the ore into trucks with a crash.

Text size:

"We're lucky here in Moanda. We find it about five to six metres (about 18 feet) below the surface," said manager Olivier Kassibi, whose mine yields 36 tonnes of manganese each day.

Element number 25 on the periodic table, manganese has traditionally been perceived as a useful if humdrum material widely employed in steel and alloys.

More recently, though, the silvery metal has gained star status thanks to its emerging role in rechargeable car batteries, helping to wean the world off carbon-spewing fossil fuels.

Decarbonisation of the world economy will take centre stage at the UN's COP27 climate talks in Egypt next month.

And as the great transition goes into higher gear, eyes are turning to Africa.

Its soil is rich in manganese, cobalt, nickel and lithium -- crucial ingredients in cleaner technology for generating or storing power.

The Moanda region alone contains as much as a quarter of known global reserves of manganese, according to the Compagnie Miniere de l'Ogooue (Comilog), a subsidiary of the French group Eramet which operates the site.

- Curse of oil -

But hopes that the mineral boom will translate into a new dawn of prosperity in the world's poorest continent are clouded by memories of what happened with oil.

In Africa's oil-producing countries, black gold meant a gush of wealth for a well-connected few -- but only drops for the needy majority.

Corruption sucked the dollars out of plans for roads, hospitals and schools, and environmental damage was often all that remained.

Africa's potential in new-age minerals is "huge", said the former chief economist of the African Development Bank, Rabah Arezki, who pointed out that reserves are not even known because so little exploration has been done.

But, he said, "there is very little reason to think that this windfall will benefit the people of Africa, particularly because of governance concerns."

New metals deposits are following one another at a giddying pace.

In one example, Firefinch Ltd of Australia was looking for gold at Goulamina in southern Mali when it came across lithium, said Seydou Semega, geologist and local director of the firm.

Firefinch then created a local offshoot, Leo Lithium, and inaugurated the mine in early 2022 -- a facility that it says could create 1,200 jobs and generate more than $100 million a year for Mali in taxes and dividends.

"Could Africa be the main source of lithium in the world?" asked Simon Hay, director of Leo Lithium. "Absolutely."

Comilog, which has operated the Moanda mine since 1960, claims the creation of 3,400 direct and 6,000 indirect jobs, a contribution of around $345 million per year to the national economy in various forms, plus millions of dollars in health and education provisions for the population.

"You need to have a social policy that is as committed as possible to share this wealth," said its CEO, Leod Paul Batolo.

Comilog is keen to list its green principles, which include rehabilitating and replanting extraction sites, decarbonising the energy mix of its factories and "setting limits" on encroaching on wildlife areas.

But more generally, innumerable studies say the exploitation of resources in Africa has a long and dark history of unequal distribution of wealth, corruption, environmental damage and rights violations.

- 'Value chain' -

A big problem is that Africa is typically used as a source of raw materials, and rarely for processing them into goods of higher value, said Gilles Lepesant, a geographer at the French National Centre for Scientific Research (CNRS).

"If activity is limited to mining and extracting ore, Africa will reap no benefit from the energy transition in Europe. It's absolutely necessary to invest in the value chain," he said.

He pointed to the Democratic Republic Congo, whose soil is estimated to contain half of the world's reserves of cobalt, as an example of something that is "both an opportunity and a curse."

Poorly regulated mining leads to environmental damage and encourages child labour, a phenomenon that is hard to resolve when a family's livelihood depends on it.

In the sector of tropical forestry, many rich countries have demanded traceability of wood and labour in order to reassure concerned consumers.

But this is far harder to achieve in the metals used in car batteries and other gadgets, said Lepesant.

"In a lot of cases, the mined metal is exported for refining to other countries, for example China, and then combined with other metals, so it's hard to know if the cobalt you have on your production line actually comes from such and such a mine in the Democratic Republic of Congo," he said.

Analyst Hugo Brennan of British firm Verisk Maplecroft said African nations had to strike "a tricky balancing act" -- providing incentives for investment while enforcing social and environmental standards -- to ensure their mining boom does not go the same way as oil.

(Y.Yildiz--BBZ)