Mining has been a major contributor to economic growth in Africa for over a Century.
In the SADC region alone, the last decade has seen the sector experiencing a massive decline in production, which has resulted in mines either closing down completely or cutting jobs and increased wage disputes.
Where did it all go wrong/What changed?
The South African economy was predominantly built on gold and diamond mining; making the sector an important foreign exchange earner, with gold accounting for more than one-third of exports.
In 2009, the country’s diamond industry was the fourth largest in the world.
South Africa is also a major producer of coal, platinum, manganese and chrome among other important minerals.
Ideally, each economy is best sustained by a functional sector that brings in the much required returns to further support development initiatives.
Mines have had the ability to determine increased investor confidence and create employment within communities in which they operate, pulling both skilled and unskilled labour. The adaptation of modern and innovative methods of mining has forced the mines to reconsider their position in the communities.
Mining has hit tough times in the last decade, the Marikana killings, and massive job cuts across the whole sector, mine closures and an overall economic slump which has left many analysts questioning the sustainability of mining activities in Africa. (This statement sounds incomplete)
Failure to beneficiate raw ores is Africa’s biggest downfall in fully realising the benefits of mining. Companies are faced with a dilemma when it comes to transporting raw minerals to China where they get processed and are then sold as end products. This is a one way market which increases the running costs of a mine in the region.
Governments, through Mining Indabas have called for an integrated approach in maximizing mining efforts and adopting new disruptive technologies and formulating policies that promote continued economic growth and sustainable development.
Despite all the notable problems in the mining sector, the African market still holds a vast amount of unexplored mineral wealth and is therefore, the best investment destination of choice.
Policies which are designed to promote previously disadvantaged African nationals offer a buffer to try and redress the former economic imbalances and may influence the way Africans also invest in Africa.
The recently signed intra-Africa trade by most African Heads of States is a clear indication that Africa is geared to promote free trade and open the continent for collective Sustainable Development efforts and growth.