Premima_GHS

The GHS – PANAF – PREMIMA

One of the objective of the Global Harmonized System For Panafrican Precious Minerals Management (GHS – PANAF – PREMIMA) is to improve the mineral resources policies, establish appropriate institutional, legal and regulatory frameworks, and invest in human skills, research and development, and geological and geophysical data, that are critical for the efficient and effective management of mineral resources.

PREMIMA supports a transparent, equitable and optimal exploitation of Africa’s mineral resources to underpin broad-based sustainable growth and socio-economic development.

PREMIMA is a knowledge-driven African mining sector that catalyses and contributes to the broad based growth and development of, and is fully integrated into, a single African market in a single hub, the GHS – PANAF – PREMIMA.

PREMIMA promotes a sustainable and well-governed mining sector that effectively garners and deploys resource rents and that is safe, healthy, gender and ethnically inclusive, environmentally friendly, socially responsible and appreciated by surrounding communities.

Justice climate-change-law1-300x200

African Mineral Sector Governance

To create a sustainable and well governed mining sector that is inclusive and appreciated by all stakeholders including surrounding communities

Governance refers to the legal and institutional environment in which various actors in the mineral sector interact. Lessons from Africa, and elsewhere, indicate that strong transparent and participatory governance processes, at all levels, can assist mineral-rich countries attain sustainable economic growth and socio-economic development. Public participation legitimizes a project, thus reducing the costs emanating from the social tensions that can result from an externally-imposed project

Generally, there has been a trend towards improved multi-stakeholder interactions with greater stakeholder engagement in policy making and decisions related to mineral development, as a whole. However, challenges remain. For a start, public participation processes are not entrenched. Governments for example, see policy making as their prerogative while between mining companies and communities; there is an asymmetry in power relations. This asymmetry is exacerbated by a general lack of capacity and material resources, especially for weak vulnerable groups. Often, there is also a mismatch between the expression of public participation rights in formal instruments and their implementation. Inadequate participatory approaches may ;lead to conflict by dissatisfied communities around mining projects.

The exploitation of minerals has been associated with the violation of human rights. This is one of the most prominent issues raised by mining-affected communities and civil society organizations working on mining issues. Respect for human rights by companies is an important part of their social licence to operate, but the scope of the obligations imposed on them by international human rights law is limited and contentious, even as it is widely recognized that with the growth of global power and reach of corporations, domestic regulation is inadequate to protect human rights from corporate infractions.

NOTE: Some information on this page are from the African Mineral Vision thought starter document 2011.

Strategic-Trends-2010-Africas-resource-wealth

Geological and mineral information systems

To develop a comprehensive knowledge of Africa’s mineral Endowment

The availability of geological and mineral data allows both the public and private sector to make informed decisions on mineral sector development. The more accessible and the information is, the lower the risk on investment in exploration and mine development. Basic geological information is usually collected and stored by Government Geological Survey Departments, while much of the mineral exploration activities are undertaken by the private sector. Geological data collected on a regular basis throughout Africa can significantly enhance the mineral prospectivity of the continent, and lead to increased green-fields private sector exploration and mine development investment. An added benefit is that geological information has a universal value and is useful in other economic sectors, such as infrastructure and agriculture

Currently, there is limited availability and access to basic geological information and mineral inventories in Africa. A large percentage of the continent is yet to be geologically mapped and explored in a systematic manner and at an appropriate scale. This is mainly due to the inadequate capacity in most member States to carry out exploration activities and store these in digital geological information systems.

The inadequacy of geological and mineral information has resulted in African countries being disadvantaged during negotiations with mining companies. Geological data, including maps and mineral resources inventories are the essential basis for assessing the potential for mineral projects and granting exploration and mining permits. Thus a comprehensive geological and mineral information database will provide governments with better decision-making options and the capacity to negotiate sustainable mineral development contracts with foreign investors.

However, the production, maintenance, and management of geological and mineral information data requires a lot of fieldwork and the use of modern exploration technologies, as well as skills that are generally in short supply in Africa.

NOTE: Some information on this page are from the African Mineral Vision thought starter document 2011.

gold_markets

Mining revenues and Minerals rents management

To create a sustainable and well-governed mining sector that effectively garners and deploys resource rents

There is a widespread sense that Africa does not obtain commensurate compensation from the exploitation of its mineral resources. This sentiment has become particularly pronounced since the current mineral commodity boom, which has substantially lifted profits for mining companies. Partly this is due to the fact that the fiscal provisions for collecting mineral rent1 are not optimised.

While revenue from mineral operations offers governments development finance, a persistent concern, however, is the inflow of revenue which tends to undermine the competitiveness of other economic sectors exposed to international competition the so-called “the Dutch disease”.

Thus financial inflows from mining need to be channelled into long-term physical and social capital and include systems that allocate part of the mineral revenue to communities near mining areas as well as local authorities.

An important element of a mineral regime that can contribute to optimizing the developmental impact of mining is setting a fair market value of resources “price discovery”. Transparent and competitive concessioning of known mineral assets can help. Public tender will clearly have suboptimal results for terrain with no known assets or areas of low prospectivity. Thus, this strategy requires that the state has full knowledge of its geological assets.

NOTE: Some information on this page are from the African Mineral Vision thought starter document 2011.

Small scale miners

 Artisanal and small scale mining (ASM)

To create a mining sector that harnesses the potential of artisanal and small scale mining to advance integrated and sustainable rural socio-economic development

Artisanal and small scale mining is widespread in Africa and exploits a very large number of minerals. These range from diamonds and a variety of other gemstones, to precious metals, such as gold and tantalite, to industrial minerals, including limestone for aggregate and agricultural purposes, clays for pottery and other uses and many other non-metallic minerals. Generally, small scale mining makes a positive contribution to African economies but, more importantly it sustains livelihoods, especially given the large numbers of people involved.

Yet this sector is beset with a number of challenges which prevent it reaching its full developmental potential. Many of these are well known and include inadequate policy and regulatory frameworks; the limited technical capacity of miners; inadequately explored mineral bearing areas; lack of access to finance and appropriate technologies; and regrettably, child labour issues. These challenges generally lock small scale miners in a cycle of subsistence operations with significant negative consequences on the environment and human life. Further, the ASM sector is also prone to trade in conflict minerals as many of the miners operate outside the law for various reasons.

The ASM sector can be transformed into an engine for sustainable development, particularly in rural areas, if these challenges are adequately addressed through a series of well targeted interventions. These should recognise the need for ASM policy to be embedded into a broad rural development strategy, taking into account the poverty cycle that limits the development of the ASM sector in Africa. ASM interventions ought to also target transforming operations into viable ones, wherever possible.

NOTE: Some information on this page are from the African Mineral Vision thought starter document 2011.

Governance bank_building

Building human and institutional capacities

To create a mining sector that is knowledge driven and is the engine of an internationally competitive African industrial economy

Institutions that support mineral development in Africa are generally weak and not necessarily appropriate to meet the objectives of the AMV. These weaknesses extend to government departments charged with the responsibility of formulating policies, laws and regulations related to mining.

Premima capacity building The above weaknesses also extend to education and training institutions. These are characterized by geographical paucity in the continent, and where they are available, they are generally poorly funded and face debilitating manpower shortages. This results in significant shortages in mineral related skilled manpower both in qualitative and quantitative terms. Partly, the situation is exacerbated by the fact that industry does not significantly participate in the delivery of education and training as happens in mature mining countries, such as South Africa, Australia and Canada.

This, for example, includes providing capacity building courses to parliaments, local communities, civil societies and NGOs to enable them discharge their roles in providing checks and balances to Government functions, and to generally permit their effective participation.

NOTE: Some information on this page are from the African Mineral Vision thought starter document 2011.

Environ governance

Environment and social issues

To create a mining sector that is environmentally friendly, socially responsible and appreciated by all stakeholders and surrounding communities

Africa retains the environmental and social burden of mining and this reduces the benefits of its minerals exploitation when these costs are considered. While frameworks that incorporate environmental, and to a lesser extent social, issues into the evaluation of the costs and benefits of a mining projects has evolved significantly in the last 20 years, their, application to assess and regulate their impacts, has not developed that much in many African countries. Further, even in countries where these have developed, capacity to enforce them is often lacking.

The poor management and regulation of negative environmental and social impacts of mining have fuelled criticism and, in some cases, hostile attitudes towards the mining industry and governments among communities affected by mining and a range of civil society organisations.

The occurrence of these impacts can be reduced and the effects mitigated, where impacts are unavoidable.

Addressing the adverse environmental and social impacts of mining requires a multi-pronged approach. On their part, Governments need to strengthen the frameworks that govern environmental and social impact assessment, management and regulation. They should also enhance the capacities and effectiveness of regulatory agencies and improve the culture of how these institutions interact with citizens and communities affected by mining. This would help minimise conflicts and tensions with communities due to displacement and disruption of livelihoods by mining activities.

On their part, companies need to improve the practice and application of corporate social responsibility. Today there is a proliferation of CSR frameworks, norms and reporting formats— some are legislated, but most are guidelines or voluntary codes. These myriad sources and frameworks are often uncoordinated and sometimes confusing. It is important therefore to embed CSR in a framework whose responsibilities are clear and is part of a broader social development agenda that has been consultatively developed between Government, mining companies and communities. This would strengthen the social licence for mining projects.

NOTE: Some information on this page are from the African Mineral Vision thought starter document 2011.

Dollar

Mobilizing mining and infrastructure investment

To increase the level of investment flows into mining and infrastructure projects to support broad socio-economic development

Africa’s mineral resources have never been in higher demand. Prices have risen exponentially and generally investment in exploration and mining projects has increased over the past decade.

Yet due to Africa’s large infrastructure deficit, especially in transport and energy, wider investment in mining projects remains a constraint to increased mineral exploitation. This is exacerbated by the fact that mineral deposits occur in areas where economic infrastructure is unavailable.

However, it is not only infrastructure constraints that limit investment into new mineral projects.

A plethora of perceived risk factors, among them political risk, sovereign credit ratings, technical risk, etc also tend to limit the levels of investment into mining and infrastructure projects in Africa. This is more so for large scale mining and infrastructure projects with long payback periods. A further limiting factor is that domestic sources of capital, as well as the private sector, do not fully participate in infrastructure projects to unlock increased mineral project opportunities.

The motivation for investment promotion is that the mineral resource base of the region is underexploited and hence additional investment is required to increase the exploration rate for new deposits, and the development of new mines, as well as for the modernisation and expansion of existing plants. The continued investment flows into the African mineral sector requires that the international community is made aware of opportunities available in the region.

The possibility of simultaneous infrastructure and mining investment, such as a natural resources driven development corridor, offers a pragmatic approach not only for unlocking mining and infrastructure projects, but other collateral economic and social opportunities. Mining SDIs offer a practical approach to public infrastructure investments given their reasonably large requirements for water, energy and transport. While this would satisfy the current need for additional mine capacity due the high demand for mineral commodities, and mining infrastructure, the additional scope for other economic and social use would accelerate Africa’s pace of development.

NOTE: Some information on this page are from the African Mineral Vision thought starter document 2011.

R D shutterstock_3193755

Research and development

To create a knowledge driven mining sector that is a key component of a diversified, vibrant and globally competitive industrialising African economy

With the exception of South Africa, the mineral sector in Africa generates little new knowledge in terms of mining-related products, processes technologies and services. Generally, indicators for the capacity for knowledge generation and innovation are availability of scientists and engineers, the quality of scientific research institutions, university-industry research collaboration, company spending on R&D, and government procurement of advanced technology products. These are all generally much lower in Africa than those found in other emerging economies. There are a number of reasons for this, and these include the weak funding, both from public and private sources, of technology institutions and research processes and the general weak partnerships between research institutes and mining companies. This in turn leads to weak science and technology capacity. R&D needs to be aligned to each country’s national development plan and this is a key pre-requisite for an industrialisation policy based on value addition to mineral products and the development of linkages and clusters in the sector.

The dearth of institutions engaged in R&D activities in Africa presents a critical technical challenge to the competitiveness of the African mineral sector. There is therefore need to deliberately encourage research and development, and innovation which benefit from sufficient independence and financial autonomy in order to pursue the goal of the GHS – PANAF – PREMIMA to use mining as a spring board for industrialisation.

NOTE: Some information on this page are from the African Mineral Vision thought starter document 2011.