In recent years The African continent has witnessed ever growing interest in mining exploration by players small and big seeking to find new resources to feed the ever growing needs of developing and developed nations throughout the world.
Much of this need is now emanating from China, and thus not surprisingly is the presence of chinese companies and investors trawling through Africa in search of new resources.
Yet with all the interest shown in exploring and extracting minerals in the continent, there is a great chasm between the mining activities taken place in Africa and the subsequent beneficiation near the resource being extracted. Put differently downstream beneficiation is not taking place in any measurable and impactful manner to the benefit of the respective countries and their people.
Granted, much of down stream beneficiation is not possible in the main due to lack of infrastructure, industrial manufacturing backbone, lack of human resource, and of course scale of economy.
However notwithstanding the above, it is obvious that African countries and their govrenments are awakening to the fact that their natural resources are and can be brought to attain greater economic benefits, provided that local value adding is brought to bear.
How this is going to be achieved is unclear, but indications are that either additional tax on exporting minerals in their primary form will be introduced, and such taxes would be mitigated against value adding process and products derived.
One has to review the proposed mineral beneficiation by the SA government to realise that a similar drive will eventually be speading throughout Africa, that to engage in a certain level of mineral beneficiation is going to become strategically prudent when one wants to engage in mining exploration and production.
It would not be unthinkable to see in the near future major corporates, mining house, foreign para-statals etc.
offering a “package deal” incorporating beneficiation activities in order to achive competitive position when bidding for a mining license.
Viewing recent commitments made by some major mining houses in return for extrating iron ore, which include roads railways, energy generation as well as other major infrastructural developments, one realises that African countries are demanding and expecting a far more equitable sharing of the benefits of their resources.
Enter mineral beatification.This is a quite widely diversified concept, i.e it is not “one size fits all”. For example Botswana and South Africa are world leaders in the mining of diamonds, but both have next to insignificant jewelry industry. This would be and evidently is on the respective government minds as one of the ultimate paths to beneficiation, yet it is countries like India, China and other asian coutries who do most of the benefaction due to some strong competitive advantages.
It is unlikely that maxial mineral beneficiation will take place in many of the African countries simply because the manufacturing industry that would use the minerals/materials is present at that geography and is unlikely to be established there in the future.
What is possible is a measure of beneficiation that can substantially improve the the exporting value of raw materials and can smooth some of the volatility of commodity price cyclicality.