Adding value above and
below the surface to grow
Africa’s mining ecosystem

A key feature of a mature and well-developed mineral and resources ecosystem starts underground and continues above the surface in value added beneficiation processes that employ and uplift local communities. The challenge that many countries are facing is that they lack the skills base and downstream capacity to maximise their access to resources. This is perfectly highlighted in countries like Zimbabwe and Tanzania who have found themselves with deep supply bases for lithium and graphite – giving them access to the battery metals opportunity. The question is whether they will be able to fully capitalise on this.

Zimbabwe’s lithium deposits are an incredibly attractive asset and that government has moved quickly to limit exports. While the decision makes sense in the long-run, the current pressing issue   is how to ensure there are adequate resources  and skills to not only extract but build the batteries locally and develop secondary trading markets for them.

There is no question that mining businesses across the continent are benefiting from increased metals prices which are in turn driving profitability, but this brings them into the spotlight for both community stakeholders as well as government to re-invest those profits in the development of the communities in which they operate. Businesses in the spotlight focusing on beneficiation as well as investing in local skills and capacity, are likely to enjoy better relationships when they face operational or sectoral headwinds on the continent.

According to research presented recently at the World Economic Forum, Sub-Saharan Africa has about 200 million young people, of which roughly 38 million are not in any form of education, employment, or training. WeForum estimates that by 2030, young Africans are expected to constitute 42% of global youth.

The mineral and resources ecosystem needs a combination of skills development and local procurement capacity to mature over the long-term. Fortunately, we are seeing some powerful and innovative partnerships being developed and this bodes well for both skills and the development of local suppliers.

On a recent visit to Tanzania, we learnt of the limited local skilled labour force available within the natural resources sector. The problem of limited skills will be further exacerbated as opportunities within the battery metals space increase. This is where organisations such as the International Apprenticeship and Competency Academy (IACA) have a critical role to play.

IACA has established industry training facilities in mining and other industry sectors that support skills development to internationally recognised standards, providing long-term employment benefits for Africans. IACA is the first training provider in Tanzania to deliver internationally accredited programs.

Botswana and its diamond industry present an enviable model bringing together government and the private sector to ensure they can capture the maximum value from mining activities through to downstream sorting, valuation and trading of diamonds. This is achieved throughcapacitating the sector with skills development, procurement and local enterprise and supplier development – the ingredients required for growth.

To mature the African mining ecosystem, it is time to establish local knowledge to beneficiate raw materials onshore, and offer the world the products they are currently producing using Africa’s resources. Should the African mining sector fail to increase their talent pool with local qualified workers and quality suppliers, especially in the critical minerals sector, the continent will continue to import knowledge from abroad and export raw materials for downstream beneficiation.

The theme for the 2023 Mining Indaba is “Unlocking African Mining Investment: Stability, Security, and Supply” – all 3 of these elements can only be achieved through adopting a strategy which brings together all the relevant stakeholders on the continent and allows everybody to have equal access to opportunities.

As a leading pan- African bank, we are encouraged by the number of clients who are recognising that “value” is not simply created by underground activities but by an investment in the broader ecosystem.

Our team has a proven track-record of partnering with mining and resource businesses across the continent and our core mandate under Enterprise & Supply Chain Development is to provide non traditional financing to local businesses operating withinin the sector. We look forward to continuing to add value to build a mature African mining ecosystem above and below ground for clients in 2023.