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Africa Mulling Over an OPEC for its Minerals Credit: Wikimedia Commons
By Babukar Kashka
IDN-InDepth NewsAnalysis
http://www.indepthnews.net/
NAIROBI (IDN) – Africa, one of the oldest inhabited continents on Earth, and the second largest with 30 million square kilometres, is home to over one billion people. It is the world’s richest in minerals, but also the poorest one. Everybody else but Africans has been exploiting its giant resources. Now Africans appear to aim at forming their own cartel of minerals exporting countries.
Available data from the year 2005 show that the share of Africa in world production of cobalt is 57 percent, diamonds 46 percent, chromite 44 percent, manganese 39 percent, phosphate rock 31 percent, gold 21 percent; mineral fuels including coal and petroleum 13 percent, and uranium 16 percent.
Africa also accounted in 2005 for 9 per cent of world’s bauxite; 5 per cent of aluminium; 5 per cent of copper, and 5 per cent of coal, in addition to iron ore with 4 per cent; cement 4 per cent; lead 3 per cent; steel 2 per cent of zinc and similar percentage of graphite.
These percentages are, however, to be considered somehow obsolete. Many things have changed since then, not the least the steady Chinese demand for minerals.
For instance, African bauxite production was likely to increase by an average of about 10 percent per year from 2005 to 2011, while in Guinea, planned increases in alumina refining capacity of about 5 million metric tons per year in 2008 and 2009 are expected to lead to higher bauxite production.
A CARTEL
Nonetheless, recent news about Africa working for forming a minerals’ cartel were reported by The Christian Science Monitor (CSM), which wrote on May 4, 2010 that African leaders are pushing for tougher terms on mining concessions after 25 years of structural adjustment – when countries cut red tape and offered generous tax holidays to foreign prospectors.
This would come through an international alliance of Africa’s mineral-rich nations, modeled after OPEC (Organization of Petroleum Exporting Countries), a pan-African body that could influence the price of metals.
REACTIONS
The proposal has raised mixed reactions. CSM reported Mazou Yessouph Faudy, geological director for Niger’s Mining Ministry, saying: "It’s an ambitious but feasible idea." And added: "Our economy is falling. As a producer of uranium, it would be good to involve ourselves in a union of producers that could set the price."
"[Africa is] going to become a very important player in the commodity and minerals market," said Roger Dixon, chairman for South Africa’s SRK mining consultancy, who cited China’s 11.9 per cent growth in its gross domestic product, the total of goods and services produced, in the first quarter of 2010.
“… I think it’s a great opportunity for Africa to move to the forefront of things," CSM quoted Dixon, noting that according to estimates by gold mining company Randgold Resources, Africa produces 30 percent of the minerals required by the U.S. and China.
“The question is how. For African negotiators, seizing the moment may mean demanding that companies hire more locals, adhere to stricter environmental rules, or build more roads and schools for local communities,” said Dixon.
Also according to CSM, Honorary Prof. Phillip Crowson at Scotland’s Center for Mineral Law and Policy reacted questioning “…an OPEC-like cartel? That’s crazy."
"There were attempts to do this with phosphates, iron ore, bauxite, copper – none of them worked," he said, because too many nations opted out. "Mining companies don’t have to invest, and if the terms aren’t attractive, they won’t."
Some critics alert that giant corporations would go to other areas of the world if they do not feel at total ease, as they currently do in Africa, taking most advantages and enjoying impunity for all kinds of human and environmental abuses they perpetrate without being punished.
RESERVES AND CORPORATIONS
Crazy or not, the fact is that Africa is richly endowed with mineral reserves and ranks first or second in quantity of world reserves of bauxite, cobalt, industrial diamond, phosphate rock, platinum-group metals (PGM), vermiculite, and zirconium. Gold is Africa’s main mining
That big business resistance to Africa forming its own minerals cartel would anyway have to face these real facts.
They would have also to keep in mind that ongoing mining projects of more than 1 billion dollars are under way in: South Africa (PGM and gold); Guinea (bauxite and aluminium); Madagascar (nickel); Mozambique (coal), Congo (Kinshasa) and Zambia (cobalt and copper), Nigeria and Sudan (crude petroleum), Senegal (iron), among others.
Meanwhile, mineral fuels (coal, petroleum) account for more than 90 percent of export earnings for Algeria, Equatorial Guinea, Libya, and Nigeria. And 80 percent of Botswana’s exports are made of diamond, copper, nickel, soda ash, and gold).
At he same time, minerals and mineral fuels account for more than 50 per cent of the export earnings of Mali (gold); Mauritania (iron ore); Mozambique (aluminium); Namibia (diamond, uranium, gold, and zinc), and Zambia (copper and cobalt).
Regarding petroleum, Africa exported 35 percent of its oil in 2005 to the European Union (EU), 32 percent to the U.S. and 1 percent to China 1 percent, while 1 percent of African gas was supplied to Asia, while North Africa preferred to export its oil to Western countries: EU 64 percent; U.S. 18 percent, and all others 18 per cent.
Being one of largest minerals producers and exporters in the whole world, while probably the most exploited for foreign countries and corporations, Africa would have enough elements to unite in a cartel. Time will tell if it manages to do so. (IDN-InDepthNews/06.05.2010)
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