Zambia and SA wooing investors at 2022 Mining Indaba

ZAMBIA’S President Hakainde Hichilema blasted fresh air through the Africa Mining Indaba yesterday when he delivered the speech that Mineral Resource and Energy Minister Mantashe should have given only moments before.

This was according to Peter Leon, a partner and Africa chair of international law firm Herbert Smith Freehlls, following Mantashe’s address at the opening of the first Energy Indaba to be held in two years.Story continues below Advertisment

”Like Mantashe, President Hichilema told delegates that Zambia was open for business. However, unlike Mantashe, the president elevated the private sector as an absolutely key partner for the successful development of Zambia’s mining sector. He reiterated his government’s commitment to a transparent, predictable and fair investment climate with absolutely no tolerance for corruption,” said Leon.

South Africa’s mining sector was recently ranked as one of the 10 worst mining investment countries in the world, according to the 2021 Fraser Institute Investment Attractiveness Index. South Africa fell to 75th place out of 84 countries (down from 40 in 2019) and was ranked 12th out of 15 countries in Africa.

Zambia’s Hichilema announced a “new dawn” that will aim to push copper production to 3 million tons per year from around 800 000 tons last year, that there would be no “mining nationalism” and that the moratorium on the granting of new mining licences would be lifted soon.

He said the country’s economy was anchored in copper mining, and “endemic corruption” was being cleansed of mining licensing processes prior to the opening up of the industry to new investors in the country.

In addressing some of the challenges to the sector on the continent, he said Zimbabwe, South Africa, Zambia and Republic of Congo needed to find some “common ground” to fix the rail system between these countries, so that we “can move our goods and products”.

First Quantum Minerals followed Hichilema’s speech with the announcement of a $1.3 billion (R21.1bn) investment to “double down”” on the group’s copper production in Zambia and also to establish a nickel mine there.

Anglo American CEO Duncan Wanblad said the mining industry was critical to the transition to a low carbon future, in that additional quantities of minerals such as copper which is used in every electric vehicle, solar panels and wind turbines, would need to be mined to meet the demand from the transition.

“The world cannot decarbonise without the products of mining. Mining is the enabler of the energy transition,” he said, adding that the energy transition would also create entirely new economic sectors and jobs that went along with them.

“The energy transition presents a fresh opportunity to build a clean energy system that can create opportunities. Policy support, regulatory certainty and robust state institutions are important,” as was the rule of law and the rooting out of corruption, he said.Story continues below Advertisment

Wanblad said that Anglo American had reached a partnership with French energy and renewables group EDF to develop a regional renewable energy system in South Africa that would be capable of generating between 3 and 5 gigawatt, through on-site solar plants and wind turbines, which would amount to Anglo American’s total electricity consumption in the country.

He said the group was accelerating its efforts on decarbonisation and aimed to reach a target of being a net zero carbon emitter by 2050.

Mantashe said the Africa Continent Free Trade Area could cut red tape and boost trade on the continent, significantly improving mining supply chains and reducing input costs.Story continues below Advertisment

“The Just Transition to a low-carbon future will require ‘green metals’ to which Africa has in abundance of untapped resources such as lithium, copper, cobalt, nickel, and zinc.Invest in mining in Africa, it is the continent of the future,” he told the international delegates and some 30 government ministers at the conference.

Leon said there was no word from Mantashe on South Africa’s progress in fixing its dysfunctional licensing system or to resolve long-standing issues around the Mining Charter, which remain mired in litigation and controversy.

Mantashe did acknowledge the Fraser Institute’s latest results, disputing the accuracy of the latest assessment. He said at a later briefing, however, the Fraser report needed to be read “holistically” and in fact also indicated an improvement in perceptions about the regulatory and policy environment in South Africa.

Also, Mantashe announced a commitment to a 60-day turnaround from his department for self-generation licences for renewable energy, notwithstanding his acknowledgement that these approvals were being held back by the slow approvals from other departments.

Responding to a question about the slow process of approval of mining projects by his department, he said it was a “slow process,” often complicated by “three applications on one farm”, and he said the department was making slow progress on improving its cadastral system.