SPEAKING NOTES BY THE HONOURABLE MINISTER OF MINERAL AND PETROLEUM RESOURCES, MR GWEDE MANTASHE: AFRICAN MINISTERS’ ROUND TABLE 03 February 2025
Honourable Ministers and Deputy Ministers Distinguished Guests Members of the Media Let me start by expressing our gratitude to you for making the effort to join us today, despite your busy schedules. You would recall that in 2004, African Ministers came together to launch the Africa Mining Partnership as an African Union’s Ministerial organ responsible for mineral resources development and management in Africa. The African Mining Partnership culminated in the development of the African Mining Vision which is Africa’s response to tackling the paradox of great mineral wealth existing side by side with pervasive poverty. Essentially, the African Mining Vision was to serve as a developmental mining approach that insists that the path to sustainable growth is through building economic and social linkages that benefit Africa itself. In line with both the African Mining Partnership and the African Mining Vision, Agenda 2063 calls for the need to harness Africa’s natural resources to ensure that African citizens and African countries benefit from its natural endowments. In respect of critical minerals, the African Mining Vision calls for “an Africa that harnesses critical mineral value-chains for equitable resource-based industrialisation and electrification, creating critical technologies and sustainable development to enhance the quality of life of its people”. This vision is supported by the African Mineral Strategy which we have gathered here today to consider. The four pillars of the strategy are in line with the priority areas that South Africa, as the first African economy to lead the Group of Twenty (G20), intends to advance in the G20’s critical minerals agenda. We are of a firm view that the four pillars capture the broad areas that the Continent must focus on to deliver the vision, these are: i. Advancing Mineral Development ii. Developing People and Technological Capability iii. Developing Mineral Value-Chains iv. Mineral Stewardship which speaks to responsible exploitation of mineral resources The strategy further calls for a common tariff of not more than 10% on imports of critical mineral value chain products and on exports of targeted unprocessed key critical minerals. We must bear in mind that an export tariff results in lower export volumes and is likely to reduce tax revenues from exports. Therefore, our considered view is that the African continent must focus more on building capabilities that will enable the creation of higher value products and increase efficiencies so that they can compete internationally. Import tariffs may help to cushion our economies from foreign competition while we develop capabilities. However, we should be careful of imposing a tariff within the African Continental Free Trade Area (AfCFTA) as proposed in the strategy, because doing so may result in reduced trade of mineral products within the region, an outcome that would be contrary to the intentions of AfCFTA. The proposed establishment of an investment fund to provide capital to African firms to enable their participation in critical mineral value chains is welcomed. However, we would like to propose that the fund should be partly funded by all mining firms that operate in African economies and not be limited to foreign mining companies. One of the key impediments to low intra-Africa is inadequate physical infrastructure. Therefore, efforts to improve transport, energy, water and telecommunications infrastructure should be top priority. In addition, bilateral and multilateral cooperation will be required to set up mineral processing facilities. South Africa’s Mintek has over 90 years’ experience in providing industrial and mineral research including mineral processing technology and related solutions. The entity’s experience, coupled with South Africa’s active downstream processing market and well-developed export infrastructure, means South Africa is best placed for setting up some of the processing facilities. At 10% in 2023, Africa’s share of global exploration budget is very low. However, the abundance of critical mineral resources has made the continent an attractive destination for exploration investment. South Africa supports the call for African countries implement measures that will increase exploration budgets including policy and regulatory frameworks, improving the quality of information on prospectivity and creating stable political and operating environment. A key part of regulatory framework is clear royalty policy and a highly functioning tax administrative system. South Africa’s mining royalties are regulated by the Mineral and Petroleum Resources Royalty Act which set out the imposition and calculation of mining royalties. The focus on renewable energy applications in the strategy is warranted, however, in communicating Africa’s priorities in the G20 critical minerals working group it is important to also focus on other applications such as digital and medical technologies. Without further ado, let me pause here for the discussions.