Africa’s mining sector has always been a hotspot of global interest; countries like Ghana and South Africa continue to be world leaders in the mining of gold and the continent as a whole holds 22% of the world’s gold production.
Congo and Botswana also produce 55% of the world’s diamonds and overall, 30% of the world’s global mineral reserves are found on the continent. These include gold, diamonds, cobalt, copper oil and natural gas, among others.
In spite of past exploration efforts, continued investments and the prospects that Africa’s mining industry holds, various reports indicate that only 5% of the total global mineral exploration and extraction budget is invested in the continent.
While this may be regarded as a slow pace in development, in many ways, it highlights the potential of Africa’s mining industry, especially given the right regulatory and legal frameworks.
The potential and growth of the mining industry, as well as a need for transparency and regulation, were amongst key issues tackled at the annual Mining Indaba 2019 conference in Cape Town, South Africa. Officially known as Investing in African Mining Indaba, the conference is solely dedicated to the successful capitalisation and development of mining interests in Africa.
For the past 25 years, the event has brought together investors, mining companies, governments and other stakeholders from around the world to learn and network, all toward the single goal of advancing mining on the continent.
As keynote speaker at Mining Indaba 2019, His Excellency Nana Addo Dankwa Akufo-Addo shed light on the importance of minerals as a public resource and the need for transparency in negotiations between countries and companies.
In recent years, the issue of the legal frameworks that facilitate such transparency, in relation to the development and sustainability of mining, has been a hot topic within the industry. In the past, some criticism has suggested that mining in Africa has reverted to the pre-independence norms, where legal regimes existed primarily to facilitate profit for mine owners.
Legal discourse has therefore served as the basis for deliberations around the importance of upholding the integrity of investors and respecting the sovereign mineral wealth of African countries, as well as a crucial rallying point for all key stakeholders.
ENSafrica, Africa’s largest law firm, facilitated discourse around these and other mining issues at its annual VIP luncheon attended by President Akufo-Addo, President Ramaphosa, high ranking representatives from across Africa, as well as members of the Australian Government, which co-hosted the luncheon.
The firm’s mining practice covers mine development, project finance, mergers and acquisitions, mine and occupational health and safety, dispute resolution, employment and labour, mining tax, mining titles and mining law as well as community and stakeholder engagement across Africa, and has successfully advised on operations in mining sectors throughout the continent.
The firm, with twelve offices across Africa, has assisted international and regional mining companies in respect of an array of issues pertaining to the acquisition, development, operation and closure of mining assets.
ENSafrica’s facilitation in these discussions at the Mining Indaba was therefore significant and aligned with President Akufo-Addo’s call for, “Africa to have her own set of smart, tough lawyers, accountants and engineers to negotiate the business deals in a transparent and honest manner.”
This call for the interests of Africans to be well represented is particularly critical, as investors often grapple with an ever changing legal landscape and an
absence of certainty regarding legal frameworks in trying to make decisions on whether or not to invest in particular African jurisdictions.
President Akufo-Addo further stated, “We must strike deals that are fair to both sides, and can reassure the long-suffering African people that they are no longer being unfairly treated”, adding that, “reviewing mining contracts is important for more than earning greater revenues.”
While he acknowledged that companies that come to do business in Africa must make their profit, the President also made clear the need for them to function under conditions that pertain in other parts of the world.
With the rapid growth of the extractive sector, and mining in particular, it is clear that Africa is also rising to meet the legal and regulatory challenges that come with the territory. The emergence of local legal expertise from firms such as ENSafrica ensures that Africa’s voice is heard loudly, in negotiating its place on the international market, and its interests represented strongly.
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