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Africa conf-report en Conference report High-Level Conference EU-Africa Partnership on Raw Materials Translating Mineral Resource Wealth into Real Development for Africa Brussels, 26 January 2012


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Conference report

High-Level Conference EU-Africa Partnership on Raw Materials
Translating Mineral Resource Wealth into Real
Development for Africa
Brussels, 26 January 2012

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  • 1. 1 Conference report High-Level Conference EU-Africa Partnership on Raw Materials Translating Mineral Resource Wealth into Real Development for Africa Brussels, 26 January 2012 More than 300 delegates from Africa and the European Union gathered at Brussels Metropole Hotel on 26 January 2012 to attend the High-Level EU-Africa conference under the theme “Translating Mineral Resource Wealth into Real Development for Africa. The conference was attended by representatives from the following African countries: Ethiopia, Zambia, Ghana, Kenya, Niger, Nigeria, Burundi, Guinea, Tunisia, Gabon, Democratic Republic of the Congo, South Africa, Tanzania, Mauritania, Djibouti, Chad, Liberia, Madagascar, Burkina Faso, Togo, Malawi and Uganda. The strong attendance was testimony to the importance that representatives from both the public and private sectors from Africa and the European Union attach to the issue of mineral resource wealth. Since the AU and EU agreed on a Joint Africa-EU Strategy in December 2010 in Tripoli, Libya, which included a priority on raw materials, European and African initiatives on raw material have been gathering pace. The Joint Africa-EU Strategy Action Plan 2011-2013 was adopted and states that "we should work toward a coherent vision on development, mining and raw materials, to support African capacity at the appropriate national, sub-regional or continental level and within the available cooperation instruments". The African Union has come up with an African Mineral Vision (AMV), a framework aiming to help Africa derive the maximum benefits from the exploitation of its vast mineral reserves. In December 2011, African Union ministers in charge of mineral development have adopted the AMV implementation plan. In the meantime, the EU has released its Raw Materials Strategy, which provides guidelines on how the EU and its companies should act in order to secure the supply of raw materials in a sustainable manner. Important steps towards working together on raw materials in a sustainable manner have been taken and materialized into the holding of a joint AU-EU High-Level Workshop on Mining Taxation in December 2011, in Addis Ababa. The current conference in Brussels is another step to enhancing AU – EU cooperation in the important fields of good governance, investment and infrastructure and geological knowledge and skills. "As this is the first conference on development and mining to take place under the auspices of the EU's Raw Materials Initiative launched in 2008, this is an excellent opportunity for us to share our experiences and views on how mineral wealth can foster broad-based growth, especially in Africa where the availability of resources has not always led to inclusive growth for Africa's people," Antonio Tajani, Vice-President of the European Commission in charge of Industry and Entrepreneurship.
  • 2. 2 As the European Commission Vice-President Antonio Tajani, and Ethiopian Minister of Mines Sinknesh Ejigu stressed in their keynote addresses of the importance for Africa and the European Union to strengthen their cooperation and make their partnership one for “win-win” situations. Vice-President Tajani said that he personally thought that the riches generated by the exploitation of mineral resources could, and should act as an engine of inclusive growth and sustainable development. He said that mineral resources, if well managed, would turn Africa into the continent of the future and stressed that the EU was ready to cooperate with its African colleagues to make the agreement produce concrete results. Minister Sinknesh Ejigu said in her address that she believed that African countries could not alone overcome the challenges confronting the mining sector. Africa’s development partners like the EU have also important roles to play. In the first panel discussion on good governance, Alexandre Barro Chambrier, Gabon Minister of Mines said that Africa and the EU were at crossroads and needed to redefine the nexus of their partnership. This was echoed by Mohamed Ibn Chambas, Secretary General of the ACP group of States, who stated that the old narrative in the AU – EU relationship needed to give way to a new narrative, based on a win-win situation. Laurent Coche, Executive Vice-President for Sustainability for the Central African Region, AngloGold Ashanti, stressed the importance for investors to change their approach from one based only on Corporate Social Responsibility projects to one of sustainability. Hugh Elliot, Head of Government Relations, Anglo American, said that African countries should mitigate risks by having stable laws and thus attract investment. Emmanuel Kuyole, West Africa Regional Coordinator at Revenue Watch, pointed out that African states should be more transparent in their management of mining revenues. In the second panel discussion on investment and infrastructure, Richard Musukwa, Zambian Deputy Minister of Mines, insisted on the need for African resource-rich countries to improve their infrastructure. Alexis de Roquefeuil, Lead Capacity Development Expert, the African Development Bank, said it was possible to raise the finances needed to build infrastructure by using innovative financial instruments such as infrastructure bonds. Paolo de Sa, Manager, Sustainable Energy, Oil, Gas and Mines, the World Bank, said that the bank was looking at increasing its involvement in project finance in the field of infrastructure building while Joe Mathews, Head of Government Relations, ArcelorMital, said that neighboring mining countries should look at creating cross borders synergies. In the panel discussion on geological knowledge and skills, the Ethiopia Minister of Mines, Sinknesh Ejigu, and the Burundi Minister of Mines, Come Manirakiza, said that geological mapping was crucial to give African countries increased bargaining power. They were echoed by Siyan Malomo, Director General, Nigerian Geological Survey Agency, who stated that establishing geological and mining information systems was important for the AU. Franca Schwarz, Head of Unit of International Cooperation, BGR and Luca Demicheli, Secretary- General, EuroSurveys, said that cooperation in geological mapping would boost capacity building efforts by African countries. Panellists agreed that strengthened cooperation between the AU and EU would be beneficial for both blocs as it would lead to win-win situations. "[…] challenges facing Africa, especially in the extractive industry, will only be solved through our coordinated efforts in order to bring development of the sector and meaningful contributions in stimulating and diversifying other sustainable economic sectors. Therefore there is a strong need to share experience, information, identification and dissemination of best practices and even expertise among ourselves. We believe that African countries can't alone overcome these challenges confronting the mining sector. Our development partners, like the EU, have also an important role to play in this respect." Sinknesh EJIGU, Minister of Mines, Ethiopia
  • 3. 3 Opening speech of Antonio Tajani, Vice-President of the European Commission and Commissioner for Industry and Entrepreneurship Your Excellencies, Ladies and Gentlemen, First of all, I’d like to thank you warmly for being present here today. And I would like to welcome our friends from Africa who have had to travel long distances to be here. This is the very first conference on development and mining exploitation since the launch of the European Union’s initiative on raw materials and the adoption of the “African Mining Vision” last year. This is an excellent opportunity to share our experiences and opinions on how to use mineral riches to sustain economic growth and diversification for all of us but especially for Africa where the presence of mineral resources has not always translated into an inclusive growth for all the peoples of Africa. I personally think that the riches generated by the exploitation of mineral resources could, and should, act as an engine of inclusive growth and sustainable development. Mineral resources, if well managed, will turn Africa into the continent of the future. This event is taking place at a key moment, barely more than a year since the heads of states of the two continents had agreed in December 2010 in Tripoli to work together in the framework of joint Africa – European Union joint strategy on raw materials. This strategy is based on cooperation in three main areas: • Good governance • Investments and infrastructure • Geological knowledge and skills In the meantime in February 2011, the European Commission has given new impetus to its strategy on raw materials, which includes a number of concrete and substantial steps that the European Union wants to take to improve access to raw materials, to efficiently use them and to recycle them. This strategy has, since its being adopted, received the strong support of the European Parliament and of the European Union Council of Ministers. Policies on mining activities in Europe, on innovation, trade and recycling are all included in the strategy. And the issue of development on the backdrop of an “active diplomacy on raw materials” is also part of the key priorities identified for our action. I am therefore glad to hear that the African Union’s Mining Ministers have approved a detailed implementation plan of the African Mining Vision. The two continents are now endowed with solid and coherent policies that will allow mining exploitation to fully play its role of engine of economic growth for years to come. This affords me now the opportunity to explain in details how, in my opinion, the European Union and African Union can carry on working together to implement our joint strategy. I will at the same time touch on some of the measures that the European Union has proposed and started to implement in the framework of her strategy. In the field of governance the European Commission has worked hard on how to improve the positive role that European mining companies could and should play in the mining sector worldwide. We are convinced that more transparency in mining is good, not only for ethical reasons but also for investment. To tackle this issue, the Commission has decided that in the framework of its strategy, the development policy should promote greater transparency in mining pricing and revenues. Thus in spring 2010, in its Communication on taxation and development, the Commission has underlined the importance of good governance in the field of taxation.
  • 4. 4 Moreover, in the framework of the reinforced strategy on raw materials we have, since early February 2011 called for an increased support to the Extractive Industry Transparency Initiative (EITI) and requested that the disclosure of financial information in the extractive industry be improved and we have been looking at the eventual adoption of the obligation of country-by- country reporting. These proposals, which I have submitted to the board of directors of the EITI last March, have been followed by concrete actions. For instance, last October, the Commission has tabled draft legislation that would oblige mining companies from the European Union to publish payments made to governments in Europe, Africa and elsewhere. We are convinced that should such legislation be passed it would have positive effects in the long term. Also in December 2011, the EU, the African Union and the United Nations Economic Commission for Africa (UNECA) held a workshop on mining taxation in Addis Ababa. Its aim was to look at ways for African resource-rich countries to negotiate better deals with mining houses. Still on mining taxation, the European Union will encourage partner governments to elaborate complete reform programs aiming to improve mining fiscal regimes and revenue and contracts transparency. We will also encourage them to build their capacity in the management of revenues from mineral exploitation with a view to sustain development efforts. Until now, I have discussed issues of governance. Though good governance is a necessary factor (of development), it is essential for one to acknowledge that a mining sector will be sustainable if it attracts investments in transport, environment, energy and mining infrastructure. For the mining sector to be sustainable, it also requires a level of geological knowledge and skills. These must be available. In the field of capacity building in geological skills, the knowledge that a country has of its mineral resources will prove crucial in contractual negotiations. The Commission believes that the European Union could help developing countries to increase their geological knowledge and consequently better assess their raw materials reserves, draft budgets based on projected revenues expected from reserves of the assessed mineral resources and in fine have a bigger bargaining power when negotiating and handing exploration and exploitation licenses. Capacity building and skills retention are challenges and these should not be neglected. The European Union is already active in this field and is using its research budget to achieve cooperation goals. One concrete example of cooperation is the AEGOS project, which gathers together European and African surveys with the aim to increase the level and quality of geological date on available resources in Africa. When it comes to skills, European countries that boast a strong mining sector such as Sweden are involved in the promotion of mining skills. This having been said, there is lot of room for future interaction in these fields. And I intend to launch two new projects in this field, especially in the geological monitoring of available mining resources in Africa, once the Partnership on Innovation in Raw Materials will have been launched next month. The third area, which I would like to discuss here and which forms one of three priorities in our joint European Union – African Union joint strategy is the promotion and diversification of investments, the development of infrastructure and the improvement of trade. In its Strategy on Raw Materials, the Commission has underlined the necessity to work as much as possible with the European Investment Bank, European financial and development institutions and to cooperate with African national and regional authorities. In particular, we have promised to see whether it would be possible to augment the number of loans extended to mining and refinery projects as well as to post-extractive industries. We have also planned to look at the possibility to promote financial instruments underwritten by the European Union – notably by the European Development Fund, which allows for the reducing of risks for mining operators. The recourse to the European Union – Africa Fiduciary Found with the aim to boost infrastructure could also be envisaged. Finally, it is clear that for mineral-rich country mining exploitation is not an end in itself, rather that mining revenues, skills and expertise that come along with a solid mining sector should
  • 5. 5 equally contribute to development and economic diversification at the local level. For mining to lead to “win-win” situations for developing as well as developed countries, it is essential that local populations benefit from it. As you can see, we did not remain inactive but there still is a lot to do to achieve our objectives. However, I can see there is a real involvement and increased levels of energy on both the European and African sides to act on the three aforementioned areas, which form the basis of the agreement reached in December 2010. On our part, we are ready to cooperate closely with our African colleagues to make this agreement produce concrete effects as soon as possible. To achieve this, we could take the lead from the workshop on mining taxation – which I alluded to earlier – and we are looking at similar initiatives where we could engage with our African colleagues and experts from the industry and the civil society. Moreover, if this constitutes a priority for our African friends, they should include such initiatives when drafting their cooperation priorities. Yesterday already, African and European experts met in Brussels to discuss concrete actions (on these three fields) and have made recommendations. I am glad to be a witness of such joint effort and would like to salute this important contribution to our debate today. I am convinced that these achievements and those of today’s conference will bear important elements, which we will take into account for our future activities. The aim should be “win-win” situation and I am convinced that with everyone involvement this is achievable. Enjoy the conference!
  • 6. 6 Opening speech of H.E. Mrs. Sinknesh Ejigu, Minister of Mines of the Federal Democratic Republic of Ethiopia H.E. Antonio Tajani, Vice President of the European Commission for Industry and entrepreneurship, Excellencies, Development partners, Distinguished Participants of this conference, Ladies and Gentlemen, I would like to express my pleasure and honour for the opportunity I have obtained to deliver opening statement to this very important high-level conference on EU-African partnership on raw material translating mineral resource wealth into real development for Africa. Excellencies and distinguished Participants Minerals form the basis of almost every human activity, in one form or another, directly or indirectly, in Industry, Agriculture, and in the household. As a consequence of this relationship, Industrial Development in the widest sense, depends on the availability of mineral resources. Without an adequate supply of mineral raw materials no industrial development takes place. Despite its mineral potential, Africa is the poorest and least developed continent in the world. The contribution of the mineral industry in stimulating and diversifying the economic growth of most African countries is very limited and as a result the countries and the people have not benefited from the mineral resources. There are various Challenges that we have faced in our continent in developing our mineral potential and bring significant contribution to the national economy of our continent. Excellencies and distinguished participants The major challenges confronting our continent in developing the mineral industry are: • Lack of sufficient geosciences information in large part of our continent. • Lack of capacity in negotiating administering and monitoring the mining contracts • Low level of upstream and down-stream value addition and poor economic linkages between the mining sector development and other sustainable economic sectors. • Lack of investment due to mainly the capital intensive nature of the mineral industry. • Lack of capacity in assisting and managing Artisanal and Small scale Mining (ASM) • Environmental degradation and negative impacts on the local communities and others. These challenges facing Africa especially in the Extractive Industry will only be solved through our coordinated efforts in order to bring development of the sector and meaningful contribution in stimulating and diversifying other sustainable economic sectors. Therefore, there is a strong need to share experience information, identification and dissemination of best practices and even expertise among ourselves. We believe that African countries can’t alone overcome these challenges confronting the mining sector. Our development partners like EU have also important role to play in this respect. Excellencies and distinguished participants, Although a large part of our continent is poorly, surveyed, mineral resources already discovered with these limited exploration activities are huge and significant, the mineral exploration conducted so far on limited parts of the continent have come up with significant and huge discoveries of Gold, Platinum, Diamond, Chromite, Manganese, Iron, Cobalt, Banxite, Uranium and other metallic and industrial minerals that are of world significance. Most of these mineral resources are exported as raw materials without any local value addition. This is one of the challenges that we have in Africa.
  • 7. 7 Excellencies and distinguished participants, If mineral resources are to be blessing to Africa and serve as a key instrument for the realization of sustainable socio-economic growth and development alleviation of poverty, the principles of good governance accountability and transparency must be adequately reflected in the development and management of these non-renewable natural resources. It is indeed time now for us to focus our efforts in devising a mechanism and enhancing existing ones in support of our mining sector development efforts. We aspire for a much broader based continued and enhanced cooperation among the concerned African Mining Sector stakeholders. A common and shared continent’s vision should come at the centre of such cooperation. The vision’s essential aim is to diversify and develop competitive African Mining Industry, which contributes in translating the continent’s socio-economic development through creation of economic linkages. It lays out a road map to achieve mining reforms on Africa’s own terms. Therefore, the expectations and the right approach to the EU-Africa partnership in mineral development is to fit into the African Mining Vision and its implementation plan of action to realize the major theme of this high level conference which is “Translating mineral resource wealth into real development for Africa.” Finally, wishing successful deliberations, I would like to thank the European Commission for organizing and hosting this very important high-level conference. Thank you for your attention.
  • 8. 8 Speakers and moderators’ profiles Antonio Tajani, Vice-President of the European Commission, Commissioner for Industry and Entrepreneurship Antonio Tajani is Vice-President of the European Commission, since May 2008, and also the European Commissioner for Industry and Entrepreneurship. Following his career as a journalist, served as Member of the European Parliament between 1994 and 2004. Vice President Tajani was a member of the Convention of the Future of Europe which drew up the text of the European Constitution and Member of the Bureau of the European People's Party and its Vice-Chair. Sinknesh Ejigu, Minister of Mines, Ethiopia Sinknesh Ejigu is the current Minister of Mines of Ethiopia. Prior to becoming a minister, she was a hydro-chemist at the International Atomic Energy Agency (IAEA) and in that quality assisted in the implementation of the regional Isotope Hydrology Project (October1988- May 1996). She was also a geochemical and hydro chemical analyst at various divisions of the Central Geological Laboratory in the Institute of Ethiopian Geological Survey (EIGS). Nadia Calvino, Deputy Director General in DG Market Nadia Calvino is Deputy Director General in DG Market. Prior to her appointment, Nadia Calvino was the Deputy Director General for Mergers in the Directorate General for Competition of the European Commission. Alexandre Barro Chambrier, Minister of Mines, Petroleum and Hydrocarbons, Gabon Alexandre Barro Chambrier is a Gabonese politician and economist, currently serving as the country’s Minister of Mines, Petroleum and Hydrocarbons. Prior to taking this assignment, he was Deputy Minister in several Gabonese governments. He was the Executive Director of the International Monetary Fund, representing 24 Sub-Saharan African Countries at the International Monetary Fund Board. Between 1990 and 1994 Alexandre Barro Chambrier served as a Senior Advisor to the Prime Minister of the Republic of Gabon. Mohamed Ibn Chambas, Secretary General, ACP Group of States Dr Mohamed Ibn Chambas hails from Ghana. He is a prominent African public figure, formerly the President of the Economic Community of West African States (ECOWAS), known for his visionary style of leadership and astute negotiating skills. Dr Chambas is credited with helping to “breathe new life” into the ACP Group, during a critical time marked by a changing geopolitical landscape, global challenges of poverty and financial stability, and an intensified focus on the Group’s future. Since taking office, Dr Chambas has implemented major reforms at the ACP Secretariat, and continues to push for the reinvigoration of the ACP Group’s partnership with the European Union, while also strengthening South-South cooperation amongst ACP and non-ACP countries and forming strategic alliances with other partners.
  • 9. 9 Laurent Coche, Senior Vice President for Sustainability for Continental Africa, AngloGold Ashanti Laurent Coche is AngloGold Ashanti’s Senior Vice President for Sustainability in the Continental Africa Region, responsible for developing integrated mine sustainability approaches that prioritize community development, economic growth and environmental protection while maximizing shareholder value. Mr. Coche has extensive experience in international development, having served for many years with the United Nations Development Programme in West Africa where he focused on training and capacity building for private sector and rural development. Mr. Coche led the UNDP’s “Multifunctional Platforms for Poverty Reduction” project, benefitting 45 communities in Mali, and subsequently coordinated the expanded Multifunctional Platform Regional Program. Luca Demicheli, Secretary-General, EuroSurveys Luca Demicheli is the Secretary-General of EuroSurveys, an organization of 33 European Geological Surveys. Its statutory aims are to address the European issues, to promote contributions of geosciences to EU affairs, to offer technical assistance to the EU and to provide a network between the geological surveys. Emmanuel Kuyole, Africa Regional Coordinator, Revenue Watch Emmanuel Kuyole is the Africa Coordinator of RWI, a non-profit policy institute and grant- making organization, which promotes the responsible management of oil, gas and mineral resources for the public good. Emmanuel Kuyole previously worked as Programme Officer with Structural Adjustment Participatory Review Initiative (SAPRI), a global tripartite initiative launched in 1997 involving the World Bank. He was also head of programmes (2005-2008) for the Integrated Social Development Centre (ISODEC), a regional research and advocacy organization based in Ghana. Emmanuel is an active member of several campaigns including Ghana Publish What You Pay (PWYP) and he served on the Ghana EITI Multi-Stakeholder Committee from 2004-2008. Emmanuel Kuyole joined Revenue Watch Institute in February 2008 and is currently responsible for strategic leadership, management and coordination with respect to the Africa portfolio and the Ghana regional office. Hugh Elliott, Head of Government Relations, AngloAmerican Hugh Elliott has worked at Anglo American plc since 2006. He was appointed as Head of Government Relations in August 2011. Anglo American is a diversified global mining company with operations primarily in Southern Africa, South America and Australia. He previously served in the UK Foreign and Commonwealth Office in a variety of roles in London and overseas. Postings included the British Embassies in Madrid (1991-1996), Buenos Aires (1999-2002) and Paris (2002-2006). Hugh Elliott is also Chairman of Canning House, the UK’s centre for Latin America. He studied Spanish and French at Trinity College, Cambridge. Richard Musukwa, Deputy Minister of Mines, Zambia Richard Musukwa is Deputy Minister of Mines and Natural Resources of Zambia, with a wealth of working experience gained in both the private sector and government. He is a Member of
  • 10. 10 Parliament for the Copperbelt Province in Kitwe. Mr Musukwa is a former secondary school teacher for Physics and Mathematics. He later joined Konkola Copper Mines Plc where he served for six years and went on to work for the National Union of Miners and Allied Workers for seven years. Prof. Siyan Malomo, Director General, Nigerian Geological Survey Agency Prof. Siyan Malomo is the Director General of the Nigerian Geological Survey Agency and on a practical level has been heavily involved in the shift of the Nigerian economy to the development of solid mineral resources in Nigeria. He established a remarkable turnaround of moribund institutions (the Geological Survey Departments of the Ministry of Solid Minerals Development) and made it an enviable one (the Nigerian Geological Survey Agency). Prof. Malomo is currently an adjunct Professor at the Federal University of Technology, Akure, Nigeria and has more than fifty publications to his credit. He has had teaching and research experience at Universities in the Nigeria, U.K., Brazil and France. Joseph Mathews, Head of Government Relations, ArcelorMittal Joseph Mathews is responsible for government and community relations as ArcelorMittal implements its mining strategy. Prior to this current assignment in London, Mr Mathews has been the Chief Executive Officer of the Liberia project from its inception in 2006 until that project was transformed into an operation that began exporting iron ore in September 2011 from the Nimba region of Liberia. This role involved the fast track setup of a Greenfield mining project and a business organization in a difficult environment and economic times. Franca Schwarz, Head of Unit of International Cooperation, Bundesanstalt für Geowissenschaften und Rohstoffe (BGR) Franca Schwarz is the current Head of the Sub-Department International Cooperation of the Federal Institute for Geosciences and Natural Resources (“Bundesanstalt für Geowissenschaften und Rohstoffe”). Her responsibility is to lead management in concept development, project review, realization and supervision of international projects (mainly in development cooperation). In this regard the cooperation with German ministries as well as international institutions is a key area. She has studied geology in Germany (Tübingen) and in Argentine (Salta) and worked all over the world. Franca has extensive worldwide connections and networks with geo-science projects and programs and serves as advisor to several international committees (i. a. UNDP, CCOP). Paolo de Sa, Manager, Sustainable Energy, Oil, Gas and Mining, the World Bank Paulo de Sa is the Manager of the Sustainable Energy Department, Oil, Gas and Mining Unit at the World Bank, where he coordinates and leads the Bank’s oil, gas, and mining lending activities and technical assistance in more than 50 countries. Dr. de Sa also heads four global programs and partnerships in the oil, gas and mineral sectors including: the Extractive Industries Transparency Initiative (EITI), the Global Gas Flaring Reduction Public-Private Partnership (GGFR), the Petroleum Governance Initiative (PGI), and the Communities and Small-scale Mining Partnership (CASM).
  • 11. 11 John Kaninda, Senior Consultant, African European Affairs Consulting A former lawyer and journalist turned communications consultant, John Kaninda is a senior consultant specializing in Euro-African public affairs with a focus on issues of corporate governance, good governance and transparency. Andris Piebalgs, EU Commissioner for Development Andris Piebalgs is an experienced Latvian politician who occupied key positions in both national and European political fields. During the first Barroso Commission, starting in November 2004, he was the European Commissioner for Energy. In that capacity, he led the development of a more competitive, sustainable and secure European energy system, which is one of the crowning achievements of the Barroso I Commission. In doing so, he was instrumental in propelling EU energy issues into the centre of EU policy-making. In recognition of his leadership in European energy policy, The Economist magazine honoured him with the title "Eurocrat of the Year" in 2007. In 2009, Andris Piebalgs received the "Diamond Prize" from the Regional Chamber of Commerce in Katowice (Poland) for his work in developing a cohesive European Energy Policy for future generations. In 2009, the Energy Efficiency Global Forum presented him the Energy Efficiency Visionary Award for his "outstanding contributions to the advancement of energy efficiency". Alexis de Roquefeuil, Lead Capacity Development Expert, the African Development Bank Dr. De Roquefeuil is currently a Lead Capacity Development Expert at the African Development Institute where his responsibilities include managing knowledge information and learning products, in particular internet-based education and learning. Prior to joining the African Development Institute, Dr. De Roquefeuil was an Education operations Manager at OSHD. He brought a vast amount of experience to the Bank having worked in the field of Education management for the World Bank, the European Union, the United Nations and the French Ministry of Education, in Africa, Latin and North America, Asia, and Eastern Europe. Dr. de Roquefeuil holds a PhD in economics (Sorbonne 1) and is a Sciences-Po Paris graduate. Paolo Zegna, Vice President for Internationalisation Mr Paolo Zegna, over the years, he has covered various key positions in the Ermenegildo Zegna Group. Member of the Board of Directors of Ermenegildo Zegna Holditalia S.p.A. since 1989 and became Chairman in December 2006. Wilfred Lombe, Chief, Infrastructure and Natural Resources Development, UNECA Mr. Wilfried C. Lombe is Chief, Infrastructure and Natural Resources Development Regional Integration, Infrastructure and Trade Division United Nations Economic Commission for Africa. Come Manirakiza, Minister of Mines, Burundi Come Manirakiza is the current Republic of Burundi Minister of Mines.
  • 12. 12 Magnus Ericsson, Senior Partner, Raw Material Group Magnus Ericsson is Senior Partner of RMG and acting CEO as well as a co-founder of the company. He is responsible for advisory services, including the development of government mineral policy, and corporate marketing and expansion strategies. Travels widely and has spent extended periods of time in southern Africa. Magnus holds a Master of Science degree from the Royal Institute of Technology in Stockholm. Magnus had almost 20 years of industrial management experience prior to joining RMG full-time in 1991. Fabrice Nodé-Langlois, Le Figaro Fabrice Nodé-Langlois has worked for the past fifteen years as a journalist for the French daily Le Figaro. He now covers international energy issues after having spent three years as Moscow correspondent. He was previously the editor of the daily science and medicine page of Le Figaro.
  • 13. 13 Session 1: Good governance Recommendations of the pre-conference expert session Transparency of Revenues • While transparency is good for companies, countries and civil society, it should be recognised as a means to an end, and not an end in itself. While it is a means to prevent corruption, it is also a means to ensuring increased revenue for governments and providing a level-playing field for investors. • Transparency should be fostered along the whole extractive industry value chain. This includes the need to address illicit flows of revenue, contract terms and not just payments made to governments or taxation in isolation. The EITI should consider expanding its scope in this regard. The EU and AU should support these efforts. • While companies and governments can work independently to increase transparency, once commitment is made, follow-through needs to be ensured. Resource-rich countries should be encouraged to introduce transparency. • Even where best practice rules are in place, the capacity of all actors (governments, companies, civil society, communities, parliament) needs to be high – especially in countries which are new to mining – so that commitments and laws made can be implemented and so that symmetry between the actors is promoted. • One way of ensuring transparency in the awarding of contracts is through open competitive tendering processes so that the bidders and the ultimate beneficiary are known and can demonstrate beneficial ownership so that bidding is fair and there is not a loss of revenues for resource rich countries. (awarding concessions) • The work of resource-rich and countries within the IGF on sustainable mining, which has been in place for over seven years, should be taken into consideration in this co- operation between the EU and Africa. Best Practices in Mining Contracts • The principle is that standard mining contracts should be publically available. • The negotiation of contracts requires the input of specialist expertise and administrative competence, which may not be available to African countries. The EU and AU should work together to identify how these problems can be tackled. In addition, lessons learned in other mining countries worldwide should be incorporated in guidelines where the long-term development perspective is incorporated. Involvement of Stakeholders • Stakeholders include communities and civil society, as well as companies, parliaments and public administrations. • There is a need to involve communities in mining, right from the start, so that resentment is avoided. Parliament’s role, as representative of the people, is also indispensable. The likely possible economic and environmental impact on these communities needs to be demonstrated in this process. In particular, the economic effect of mining – including on local employment and on business development - needs to be outlined upfront so that expectations are managed. Governments should outline the role of communities in deals with companies. • Existing open stakeholder networks, for a and local media should be used for this purpose. In addition to radio, the role of IT (websites) is an important medium in this regard. Particular efforts with regards the media should concentrate on community media, especially radios, which is the most accessible source of information. • Whistleblowers need to be protected. Grievance mechanisms should be provided. • Companies should ensure that corporate social responsibility measures are verified on the ground with input coming from local communities. And that they go beyond CSR to fully embrace sustainability in the way they conduct their business.
  • 14. 14 • Local communities should have recourse to law should commitments not be followed- through. Capacity-building/budget support measures could be used for this end. In areas where minerals may exacerbate conflicts, the approach taken by the OECD on due diligence should be supported by all those concerned, thereby encouraging responsible sourcing of minerals. The particular situation of artisanal mining in such areas needs to be given special attention, namely efforts which could be made to formalise the sector. The EU and AU should work together on this where the focus is on tackling the root causes of such conflicts.
  • 15. 15 Panel discussion Fabrice Nodé-Langlois, panel moderator, reminded the audience that a group of experts had met on 25 January to discuss the issue of governance and transparency in the sector of raw materials. Nadia Calvino Nadia Calvino, European Commission, said that the issue of good governance was a very complex one and the European Union alone couldn’t solve the problems related to good governance. There had been many steps undertaken at the level of the European Union to improve good governance, which bore positive results. She said that the positive results achieved made the EU optimistic about the future: The Communication on Raw Materials The Review of Accounting Reports: country by country reports. On this subject, the EU was pondering a legislation on country by country reporting, with the aim to bring more transparency in the field of raw materials exploitation Communication on Corporate Social Responsibility (CSR): EU Member states wanted to harmonize their views on it and put the question down for further discussion with a view to passing a legislation on CSR and give a global coherence to their action on CSR The EU had also been busy with giving support to two important initiatives in the field of raw materials: the Kimberley Process, which had led to a significant reduction of the trade in blood diamonds (from 15% of total trade of diamonds in the world to 1%). The second initiative was the initiative on the Sustainable Management of Forests: the EU had entered many bilateral agreements in a bid to ease the problem. Mohamed Ibn Chambas Ibn Chambas said that the old narrative was brilliantly known: Africa didn’t know what it had (in terms of mineral reserves in its soil). Africa had no capacity to negotiate good contracts, which would benefit resource-rich countries and was incapable to monitor production and export of raw materials. He said that Africa derived no value from its raw materials and didn’t create jobs (while sitting on huge deposits of mineral wealth) while little tax or income accrued to government. He said that Africa was losing the fight against poverty. For Mr. Ibn Chambas, Africa needed to create a new narrative by taking greater control of the elements of the old narrative and needed to build institutions, which would effectively play their (strong governments, parliaments and civil society). Public institutions to regulate the mineral resources field in an informed and effective way had to be set up. Mr. Ibn Chambas said the ACP’s Framework of Action on Mineral Resources could help the Continent progress towards a new narrative. However, he reminded the audience that players in the field of mineral resources had embarked on initiatives such as disclosure legislation and CSR projects, which were all aiming in the right direction. He said that Africa wanted a “win-win” situation and could maintain the supply of raw materials to Europe. However, the narrative for cooperation will have to change. Minister Alexandre Barro Chambrier (Gabon) Alexandre Barro Chambrier said that Africa was standing at the crossroad. The Continent had a huge mining potential, which wouldn’t bring any benefit unless good governance was strengthened. The Continent’s institutional framework needed to be reinforced and African countries needed to build their administrattive capacity through adequate training: this was crucial for African administrations to be able to negotiate the best investment deals possible.
  • 16. 16 Africa needed to endow herself with clear guidelines and regulatory, legislative and fiscal frameworks, which would take into account the necessity to standardize common rules and establish a transparent fiscal regime. The Continent needed to avoid favoring some investors in a subjective manner to the detriment of others. It also needed to see a convergence of tax rates taking place among resource-rich countries and the implementation of balanced fiscal regimes on a backdrop of transparency. Alexandre Barro Chambrier said that African countries would never be able to negotiate the best deals for themselves unless they had acquired a good knowledge of the mineral resources in their country. African countries needed to have an excellent grasp of their mining cadastre and have laws that set the procedure for public tenders and bids as well as the awarding of mining licenses and contracts in a very transparent manner. He said that one other issue inherited from the past and which crippled economic progress was the recurrent inability of African states to make a clear distinction between the state’s and the investors’ obligations and responsibilities. Often, infrastructure building was left to the mining operator – in the name of corporate social responsibility - whereas it was the State’s responsibility. Corporate social responsibility should be handled carefully and there should be clear guidelines as to what falls, or does not fall, under CSR. African States should also make sure that investments benefit nationals through “local content”, for example that locals were involved in the mining supply chain. In summary, Africa needed: • Strong institutions • Transparent legal regimes • Adequate financing mechanisms • Transparency and good governance, which would allow for an efficient management of mineral resources with a view to diversify the Continent’s economies in a transparent manner Laurent Coche Laurent Coche said that Africa and foreign investors needed to work together towards “win-win” situations. These “win-win” scenarios need to apply to different business models if they were to be beneficial for both parties in the long term. In this regards, governance was the key word. Good governance had a lot to do with stakeholders’ relations. A government should know who their stakeholders are, what their needs and constraints are. For Laurent Coche, it was not only important for governments and investors to establish a framework where principles of good governance and transparency were upheld but also where they would come to know each other, understand each other’s priorities and work towards mutual benefit. He said that AngloGold Ashanti had success in working hand-in-hand with its stakeholders – the main being the government and the communities – by establishing committees, which worked with a view to implementing the Millennium Development Goals (MDGs) around its mines. Hugh Elliot Hugh Elliot said that wherever its company had a presence, it was involved in discussions regarding good governance and played an active role in initiatives that supported good governance and transparency: • The African Mining Vision (AMV) • The Natural Resources Charter • The WEF: responsible Mineral Research Initiative • The Extractive Industry Transparency Initiative (EITI) • The Framework on Human Rights
  • 17. 17 What was emerging clearly today, he added, was the coincidence of interests of the private sector and businesses in the field of good governance. It offered opportunities but allowed for the simplification of a conceptual framework to make good governance implementable. There were two ways to achieve this: • The implementation of a progressive system in which the company would understand what was needed to comply with a given regulatory framework • The adopting of an approach that would take into account the company’s development and its economic impact in a particular market Hugh Elliot said that few people had an understanding of the payments of mining companies for taxes, salaries, dividends and other payments along their supply chain. He added that of his company’s total spending, only 4% went to the payment of dividends to shareholders while 58% went to the supply chain (as the company strived to maximize local content, transfer of skills and of technology). It was fundamental for all parties to understand the economic impact of a company in a particular market to be able to maximize on it and to adapt to the regulatory framework. Emmanuel Kuyole Emmanuel Kuyole said that the civil society wanted to be part of the debate on good governance and participate in the debate as “informed citizens”. As years went by, African governments were realizing there was a need to provide information on payments to governments. It was important for the civil society that governments of resource- rich countries be held accountable over the management of mining revenues. It is important for a government to disclose how much it was getting from deals signed with investors and whether the revenues were properly allocated and used. It is important for the civil society to know whether governments are getting the right value out of the deals they sign. Emmanuel Kuyole also encouraged governments to consider pushing for the implementation of country-by-country, as well as project-by-project reporting. This would go a long way to making information available on what was being paid to governments, local governments as well as to local communities. This would allow civil society organizations to hold governments accountable. He said that a second proposal that would help ensure governments kept mobilizing enough revenues was for governments of resource-rich countries to have flexible fiscal regimes, ones that would take into account the realities of changing economic situations, allowing them to derive maximum value from their mineral resources. Session moderator Fabrice Nodé-Langlois opened the plenary discussion by asking the speakers if they had any remarks to make on their counterparts deliveries. Discussions focused mainly on Emmanuel Kuyole’s proposal for governments to adopt “flexible” or adaptable fiscal regimes. Responding to the proposal from Emmanuel Kuyole were: Alexandre Barro Chambrier said that he would not encourage governments to implement flexible fiscal regimes as too much flexibility would definitely lead to a situation where every single company would have its “own fiscal role”. This would not be to the advantage of all stakeholders the mining He said that this was something that civil society often failed to understand. Often, civil society, despite its earnest efforts for more justice and equality, would misunderstand certain complex concepts and end up misinforming rather than informing. Consequently, civil society organizations became the scapegoats, blamed by governments who accused them of stirring controversy. He said it was important for civil society organizations to educate themselves understand the issues at hand and inform the society at large. By doing this, they would fulfil their role in today’s society.
  • 18. 18 Hugh Elliot also responded to Emmanuel Kuyole, saying that too much flexibility would end up deterring investment, as it would increase the risk. African governments needed to reduce risk to attract investments. One way to do so was by applying the rule of law. African governments needed to have clear and stable fiscal laws and from the onset had to agree with the investor on the applicable tax regimes and rates. The result would be the negotiating and signing of stable contracts, which accommodated the nature of the extractive industry (characterized by the volatility of commodity prices) On the issue of disclosure, he said that his company supported the EU proposal for disclosure. In truth the principle of disclosure had been agreed upon at EU level. He concluded it was an “acquis” principle,. On the issue of disclosure Alexandre Barro Chambrier said that government disclosure was needed from the standpoint of public management of mining revenues. What was at stake was the quality of budget implementation. He said that in Gabon, for instance, they had a stability fund made up of a portion of oil revenues. They also had a Sovereign Fund. However, since the country’s needs in infrastructure and economic diversification were huge, the authorities had paid particular attention to the caliber of people they had put in charge of managing the Funds, so that the country’s oil revenues would be used for their intended purpose. They wanted these funds to be managed in a proper manner and without political intrusion. He also said that Gabonese authorities wanted to “own” good governance. However, this would only take place through education and capacity building. On the issue of whether the way China negotiates deals with African states and if it gives Chinese companies an unfair competitive advantage over western companies and therefore if it hinders efforts for better governance and transparency on the Continent. Mr. Ibn Chambas asked whether African countries should consider countries like China, Brazil or India as partners in good governance. The principle here should be not to exclude anyone, he responded. This question was discussed during a seminar organized by the Economic Commission for Africa (ECA) at the last China Africa Summit. The seminar discussed how Africa could look after and defends its interests best. The exploitation of natural resources should be discussed in the context of a “win-win” situation. Hugh Elliot remarked that the way China negotiated and implemented its contracts on African soil was a huge concern. He said he hoped that Mr Ibn Chambas’ statement on win-win situations would turn into a reality in the future. One thing his company would carry on doing was to take strong action to help level the playing field. There still was a lot that needed being done in transparency and good governance agenda. Laurent Coche said that Africa and its partners were at the crossroads as had previously been stated by one of the speakers. There was an acknowledgement among the investor community that the way they (investors) used to conduct business needed to change. Africa and investors needed to be seen as partners in sustainability. Nadia Calvino said that the debate on governance was very interesting. She said that the different points of view expressed by the speakers and the audience would help the European Union calibrate its offer in the field of governance (she was here referring to the different initiatives launched or supported by the European Union to strengthen good governance in the field of raw materials). She added that the EU wanted to lead in spreading good practices (regarding good governance and disclosure). The EU wanted to be the first to move in this direction even if others (notably the US) didn’t want to.
  • 19. 19 Session 2: Infrastructure and Investment Recommendations of the pre-conference expert session • Mining development corridors have been identified in Africa through the NEPAD SDI program. The experience of the EU mining regions in corridor development, and in particular infrastructure development, could be applied to economically map the corridors to improve their investment potential. • Europe can assist Africa to improve the policy and regulatory framework for using minerals as a vehicle for development and at the same time, avoiding environmental degradation, drawing upon on schemes, e.g. the Minerals for Development (M4D) initiative that has been developed by Finland and Sweden. • To further facilitate the transfer of experiences both in the field of regulations and policy and from the mining activities themselves, a centre of excellence in mining is under development in the mining regions of northern Sweden and Finland. The AUC/ECA is also developing an African Minerals Development Centre, which could act as a collaborating partner. • Europe has a vast experience with CSR approaches to offer Africa; both at the private sector level and aiding/with (??) State mining companies. A good area of cooperation in CSR could include the transfer of such approaches and best practices for the governance of State mining companies • SMEs and small-scale mining operators could be used as an avenue to increase local content and diversify mining supply chains. The EU’s development policy could pay a particular attention to artisanal and small-scale mining. • Investment in beneficiation and value added may be constrained by BITs and EPAs. While export taxes are contrary to WTO rules, there is a need to explore areas for creating a beneficiation subsector including exploring incentives and export taxes to encourage beneficiation. • Resources for infrastructure swaps have helped finance Africa’s infrastructure projects, especially by China and India. There is a need to explore more innovative EU financing models for mining and infrastructure projects in Africa to allow for greater flows of investment. This includes financial reform to encourage the emergence of long-term domestic bond markets within African mining countries themselves.
  • 20. 20 Panel discussion Magnus Ericsson, the panel moderator opened the session offering the panelists the possibility of presenting short statements that would be followed by a discussion. Wilfred Lombe In his address, Wilfred Lombe said that the African Mining Vision (AMV) sought to create circumstances for the sustainable exploitation of mineral resources, which supported social development. The AMV’s pillars were: • The optimizing of knowledge of mineral resources • The building of human and institutional capacity The AMV was completely in synch with the theme of today’s conference. When it was first approved, UNECA had to develop an action plan to implement the vision, which led to a long thought process. Wilfred Lombe said that the AMV articulated itself around nine areas. The implementation plan was presented to the African Union conference of Ministers in charge of Mineral Resources Development, who subsequently approved it. It was a commitment to implement the AMV. The implementation plan contained two main programs: • Creating linkages: this program looked at how to create linkages between resource exploitation, infrastructure building, value addition, industrialization, increase in local content and how to use revenues to best diversify the economies of resource-rich countries. It required that African states endowed themselves with good policies and gained an excellent knowledge of the mining supply chain • Aligning mining agreements to the AMV: African ministers would like to see improved alignment between the agreements signed with mining houses and the AMV. The AU Mining Ministers had expressed the will to see their countries be assisted on the issue of tariff structures; they wanted to negotiate deals more effectively in the EPA framework so as to secure more value from their minerals. There was also a need to better understand how mineral resources could be used to develop infrastructure and how to gather more data. Assistance was needed to strengthen domestic markets. Joseph Mathews Joseph Mathews started his address by saying that ArcelorMittal was the world’s largest mining company with a large presence in Europe and a limited presence in India and China. The company had embarked on a strategy of integration, which had led it to acquire mines. For instance, its mine in Liberia was the 18th mine that the company had acquired, which it started developing in 2006. As a resource company, ArcelorMittal were fully committed to good governance and acknowledged that it was a good practice that mitigated risks. Good governance was one of the pillars of the company’s corporate and social responsibility policy. Other pillars were training and capacity building and ensuring that good wages were paid to workers. He said that his company looked after the community around the mines and made them benefit from increased local content in the supply chain. It had created, in partnership with other miners, a Corporate Responsibility Forum, which made sure communities were catered for, especially when it came to their involvement in the supply chain. The company was also committed to EU disclosure laws.
  • 21. 21 Alexis de Roquefeuil Infrastructure development was key to the African Development Bank’s (ADB) activities and it accounted for 40% of total finance disbursement, said Alexis de Roquefeuil. Last year, the bank had allocated US$1.4bn to infrastructure projects and $1.2bn to regional integration initiatives. This formed part of an integrated approach to project finance for the next 40 years, which included financing projects in the transport, energy, ICT and water sectors as well as agriculture through the International Fund for Agriculture Development (IFAD). In the field of transport, for instance, the bank was working at opening up regions with a strong economic potential. It was planning to finance 44 transport corridors and the building of the trans-African highway as well as the modernizing of African ports. In the energy sector, the bank’s focus was on energy projects with a low carbon footprint and was looking at trans-border energy projects. It had earmarked the spending of $4bn per year in infrastructure project finance, until 2040. One might wonder how the bank was planning to raise so much finance. Alexis de Roquefeuil said that it was possible to raise money from capital markets and that the bank was developing innovative financial instruments such as infrastructure bonds, Islamic financial instruments, etc. (The bank had partnered with the African Development Institute and the African Legal Facility to conceptualize and implement capacity building programs in the use of such innovative financial mechanisms.) Richard Musukwa In his address, Richard Musukwa described Zambia as a landlocked country endowed with vast copper, cobalt and gold reserves. The country accounted for 6% of the world’s known reserves of copper; this was an indication of the country’s huge mining potential. Zambia subscribed to the values generated by the African Union through the African Mineral Vision and wanted to derive maximum benefits from the exploitation of its mineral resources. The country had recorded an increase in investments due a favorable investment climate and the building of a good road infrastructure. Zambia needed now to invest in a reliable railway infrastructure and in power generation to make power more affordable. Zambia had encouraged the recourse to Public Private Partnerships (PPPs) and wanted to work at “win-win” situations with investors. Richard Musukwa said that his country wanted to attract foreign direct investment (FDI) but not to the detriment of his people. Paolo Zegna Paolo Zegna said that it could be helpful for everyone to take an external approach, when debating these important issues (governance, infrastructure development, etc.). He said that Antonio Tajani had put it quite clearly in his talk when he said that the question of mineral resources development had to be tackled from a much higher ground than ever before. Paolo Zegna asked how we can we approach this. First, Africa needed new customers (a new type of investors) and needed to develop relations with them. It would be important for the African continent to be closer to, and grow with, Europe. The purpose of this approach was to go beyond just investing or building infrastructure (for the sake of it); Africa should work with a plan and a timing: the Continent should set itself goals such as acquiring a deep knowledge of its mineral resources, set up timing and accountability rules for all actions (have an investment time line, determine responsibilities and obligations). Other important targets, which should be part of this approach, were education, training, capacity-building and increasing local content. A lot of goodwill was necessary to achieve such goals. And a simple, elementary but external view would help Africa see if it were moving, or not, in the right direction.
  • 22. 22 Paolo de Sa Paolo de Sa said that mining was transforming Africa through FDI, which was accelerating building of infrastructure and bringing in additional and much needed fiscal revenue. The Continent was set to continue undergoing transformation as it attracted FDI. The World Bank, for instance, was planning to invest $80bn in building infrastructure over the next five years. African transformation, however, needed to have an impact than went beyond infrastructure building. It was important that African communities benefited from mining investment through small economic opportunities afforded to them. Paolo de Sa said that working on the World Bank Mining desk was quite a challenging task. The bank had got to keep its involvement with governments and the private sector very active. While it kept financing infrastructure projects, it needed to help strengthen the capacity of authorities, shape policies and provide support to regulators. Strong institutions were needed able to frame infrastructure plans. The bank also needed to help build capacity in local governments. It was the bank’s belief that the civil society had a very important role to play and it appreciated the fact that the latter wanted a bigger intervention in mining matters. Paolo de Sa said that the bank was committed to support the AMV and its action or implementation plan. Mr. Ericsson, panel moderator, drew the audience’s attention to the fact that some of the speakers had touched on the issue of regional integration and added this is a policy of Scandinavia and had played an important role in fully realizing the economic potential of that northern region of Europe. African countries should seriously consider following that route. On the question of how Africa could benefit from mining-related infrastructure development Wilfred Lombe said that infrastructure development should not only be mining-related. He said that Africans had not seen as much investment in Africa as would have been hoped for. For UNECA, mining companies needed to develop a strategy that recognized that mining would always need energy; however, energy infrastructure should be built in a way that benefited the local population. Africa needed to see collateral economic and social value to these investments. The Continent also needed to think in terms of economic development corridors. Though this concept was not estranged to Africa (e.g. an economic corridor between South Africa and Mozambique), Africa could learn from the lessons learnt in Scandinavia, for instance. One weakness with regards to the development of economic corridors was the lack of mapping tools. The Continent needed to be able to equip itself with the tools to identify the regions where such corridors could be established. Joe Matthews said that in a mining project, a large portion of investment costs would often go to infrastructure building, usually of railway, ports or energy facilities. In Africa, many rich deposits were located far from any infrastructure, making any purported mining project unfeasible. It also happened that mineral deposits in one country were situated close to another country’s source of energy, making it possible to create synergies across borders. This is where investors needed bodies such as the European Union to step in through the financing of cross border infrastructure projects. He said that Guinea, for instance, had a tremendous hydro electrical potential whereas neighboring Liberia had a huge mining potential that could be unlocked if it imported electric power from neighboring Guinea. This could be possible through the rolling out of a power
  • 23. 23 network between the two countries. The energy surplus would be used locally (in Guinea) or exported to other countries, bringing in much needed revenue. On the place of SMEs in the debate on infrastructure Richard Musukwa said that it was important to include SMEs in this debate as they offer an avenue to increase local content in the supply chain or to improve the way small-scale mining was done. However, African SMEs struggled a great deal: they lacked the needed technical skills and often the capital necessary for their growth. Paolo Zegna, SMEs needed to be brought into the debate and helped to grow. They brought in imagination through the way they did things, integrated more easily (than multinational companies) with the local communities. It was important to create linkages between European SMEs and those in Africa. Europe needed to come up with a big plan SMEs could buy into, he concluded. Paolo de Sa said the bank needed to empower SMEs in the supply chain by teaching them “how to do it”. SMEs owners needed to be taught how to bill properly for services, they needed to learn about cash management (banking, lining up appropriate funding) and about being consistent in contract implementation. On the issue of skills, experience transfer and capacity building Wilfred Lombe said that during the last meeting of the AU held in Addis Ababa, the Minister in charge of the Development of Mineral Resources stressed the need for the creation of an African Mineral Policy and Research Centre. In the view of UNECA, the development of mineral resources was central to the AMV. Such an institution would learn from global best practices and would subsequently give technical policy support to the AU. Paolo de Sa added that the role of mining was to contribute to economic development but there were many shortcomings, which precluded mining from playing its development role on the Continent. He said that investment was needed in human capital but that, however, no such investment was taking place on the Continent, especially in the public sector, leaving huge gaps that impacted negatively on the exploitation of mineral resources. As a consequence, public institutions were weak and under-staffed. Mr. de Sa said that capacity building was needed and that Africa should also set up schools of mining. The World Bank was considering financing the creation of such schools. There were huge opportunities for cooperation, said Paolo de Sa. On the role of corporate social responsibility (CSR) in infrastructure building Wilfred Lombe said that private companies did a lot in terms of CSR in Africa. However, he raised the following question: could CSR be structured better? He added that Africa lacked a general long-term framework in which CSR could operate efficiently. What was needed, said Wilfred Lombe was a long-term social framework, which would include achievable targets with long-term benefits, for the development of resource-rich regions across the Continent. What will happen to mine-related infrastructure at the end of the mine’s life cycle? Joe Mathews responded to this question by describing the model adopted by ArcelorMittal. He said that the typical scenario would be for any mining company to own the infrastructure it had built to develop the mine (roads, railway, port, etc.).
  • 24. 24 However, his company had adopted a different approach: “We build the infrastructure and then enter into a concession agreement with the government, giving us management of the built infrastructure. At the end of the concession, we hand back management, and full ownership, of the said infrastructure to the particular State in whose territory it had been built.” One participant took the floor to comment on this issue and said that African mining cities, as much as any non-mining cities, were facing three crucial challenges, which could impact their future: • Increased pressure from a growing population • Lack of waste management infrastructure • Haphazard urban growth One way for these cities to successfully tackle these issues would be for them to establish “intelligent networks” with mining cities around the world, which had already dealt with these challenges successfully, learn from their experiences (best practices) and localize the solutions to those challenges. Joseph Ikoli from the Ministry of Mines, Democratic Republic of Congo (DRC), said that the mining industry in his country faced two important challenges: • The evacuation of copper production (copper is produced in the southern, landlocked, province of Katanga) • An acute energy deficit, which the country's electricity utility, SNEL, was trying to solve with the assistance of private companies that were financing the construction of additional electric dams in the DRC. Since neighbouring Zambia was considering reducing the volume of Congo copper transiting through Zambia, DRC had been looking at a project to revamp the Lobito railway, which stretched through Angola and used to be the traditional export route for DRC copper before it was destroyed during the civil war that had ravaged Angola for nearly three decades. Intervening in the debate was Wilfred Lombe who said that open access clauses should be included in mining contracts, allowing populations, in any given country, where mining-related infrastructure was being built, to have free access to it. On whether the Chinese model of infrastructure swaps worked better for Africa than the traditional approach by companies from former colonial masters Wilfred Lombe said that there had been progress in the field of infrastructure building in Africa (since China had increased its presence on the Continent) but not as fast as wanted. There were still windows of opportunities that Africa could benefit from, he said. Since China had remained as resource-hungry as ever, African states needed to look carefully at the way they could structure the agreements with China to ensure better benefits for Africans. Africa, said Wilfred Lombe, needed a better strategic approach to Chinese investments on the Continent. Paolo de Sa said that the World Bank had been considering investing $10bn every year into infrastructure projects in Africa but had acknowledged that China could finance far more than that amount. He said the bank had no problem if China invested more than the former in infrastructure projects on the Continent especially if everyone was happy and things were done in a transparent manner. In the closing remarks all panellists agreed that African governments wanted to see more significant involvement from mining companies in infrastructure building. They also wanted to see mining companies increase their CSR activities and increase local content in the supply chain. Finally they called upon African governments to set up a framework for the beneficiation of local minerals, which would significantly increase revenues.
  • 25. 25 Session 3: Geological Knowledge and skills Recommendations of the pre-conference expert session The participants to the Pre-Conference Expert Session on 'Geological Knowledge and Skills' agreed that, in order to 'translate mineral resources wealth into real development for Africa', the following actions included in the Joint Africa Strategy Action Plan 2011-2013 (JAES) should be given priority: • Facilitating the exploration of mineral resources potential in Africa; • Fostering co-operation between African and European geological surveys; • Enhancing capacity building to help improve the environmental management of mining, including on rehabilitation of mining sites, and management of secondary raw materials (recycling). In order to achieve the above, the experts recommended that: The further development of the Organisation of African Geological surveys (OAGS) is primarily supported Geological surveys of Africa need to be better coordinated and OAGS must be supported to facilitate networking EuroGeoSurveys (EGS) is invited to continue the cooperation with OAGS, also providing assistance, when needed, and transferring best practices. The first thing to do is to increase the cooperation among geological surveys to bring all the surveys up to a similar level. For instance common trans-boundary cartography at regional level. It is important to reinforce the networking among African geological surveys. Ensure the sustainability and technical/scientific independency of geological surveys. Cooperation among geological surveys of Africa can also developed by regional clusters using the strongest surveys in the area to help the others to grow. Gaps among different countries need to be identified. To set the right incentives in order to avoid migration of specialists from geological surveys to industry where salaries are more attractive. Capacity building is straight away developed involving also the national education and training systems EGS and OAGS should take the lead. Also practical capacity building should be implemented to assist African geologists work on the terrain. To take into consideration that geologists, mineral economists, taxation experts, legal experts, etc. are needed. African governments should be made more sensitive to the allocation of resources and infrastructures to foster capacity building Make geology more attractive to youngsters: - 6 to 9 months training to allow BSc graduates to carry out geological mapping independently - MSc level training Training must be continuous.
  • 26. 26 Working towards the capacity of African countries to be independent on training their people in this field, is also important. Geological knowledge base is developed Geological mapping capacity must urgently be developed. Assistance should be provided by EGS. Geological cartography, airborne geophysics and regional geochemistry are crucial for the mining industry and crucial to attract investment, but expensive. Technical equipment and laboratories should be put in place. The basic geological infrastructure should be reinforced. It is necessary to develop an estimation of the financial potential of mineral deposits, also implementing geological policies. Data must be archived, put together and harmonized
  • 27. 27 Panel discussion Sinknesh Ejigu Sinknesh Ejigu said that geological mapping was the responsibility of any mineral resource-rich country in Africa. The acquisition of geological data was crucial for the appropriate use of mineral resources, better contract negotiations with foreign investors and the creation of an environment conducive to investment and business. However, Africa needed geological capacity building, which could be acquired through partnerships with institutions such as the World Bank. She cited Ethiopia as an example of a country where the lack of geological capacity has hindered geological mapping, with only 56% of the country covered with a geological survey. Efficient partnerships were crucial in setting up mining cadastres, drafting appropriate mining and environment policies and leading to a structural transformation of mineral resources. Come Manirakiza Come Manirakiza introduced Burundi as a country with no mining tradition. Though there were indices of mineralization in some of the country’s provinces, with potential reserves of tantalum and nickel identified, the lack of qualified personnel at the Ministry of Mines was one of the major stumbling blocks to mining development in Burundi. The Belgian government was looking at areas where it could assist its Burundian counterpart and the holding of geological days was being planned for February 2012, said Come Manirakiza. Meanwhile, the country had kick started geological mapping and contracted two private companies to explore the presence of minerals. The agreement was of a PPP nature. Despite this progress, Come Manirakiza reckoned that an acute deficit in electric energy would hinder mining investment. Other obstacles to the take-off of Burundi’s mineral sector were: • The absence of a railway network to export minerals • The fact that the country is landlocked, making Burundian mines less competitive than more accessible mines on the Continent • The country’s political regime • The lack of a minerals’ certification scheme, owing to the old age of the National Laboratory • The lack of a modern mining code. However, the country had revised the mining code and the draft was being discussed in Parliament • The lack of a friendly business climate. The country was looking at setting up an Agency for the Promotion of Investments • Acute energy deficit. Production of electric energy stood at 40 MW, which was too little to even supply energy to a large-scale mining project. As an indication, a nickel mine needed 80 MW of electrical power to run smoothly during the exploitation phase. Luca Demicheli Luca Demicheli opened his address by asking the following two questions: what is a geological survey? What is the EU’s interest into Africa’s efforts to start geological surveys? Luca Demichelli said that a geological survey was a national agency in charge of geological sciences, the inventory of mineral deposits and the collection of information and data. The EU, he said, had a keen interest into Africa’s geological surveys as it was looking to establish a sustainable supply of raw materials, thus the EU-Africa Joint Strategy on Raw Materials. He said that the EU and Africa must base their cooperation on trust. Africa had a lot to benefit from cooperation with the EU. The EU could help Africa enhance social welfare and ensure
  • 28. 28 environmental protection. However, to establish cooperation, the two partners needed to come up with concrete proposals. Areas of cooperation could be: • Capacity building, leading to Africa’s geological surveys being scientifically independent • Skills training. It was crucial for the success of any joint initiative in this field that it be based on a strategic document accompanied by a concrete working plan, concluded Luca Demicheli. Franca Schwarz Franca Schwarz said that BGR had been the German central geo-scientific authority for more than 50 years, providing advice to the German government and industry on all geo-relevant issues. It had also acted as an implementing agency for the German development cooperation and was currently active in more than 35 partner countries worldwide. Among the lessons learned during that period is that geological infrastructure sets the ground for public policies on several aspects. However, in many developing countries, institutions and capacities related to the extractive sector, are weak. Therefore not only capacity development was a key area, but geological knowledge and infrastructure needed to be linked worldwide with broader economic, environmental and social requirements to secure a sustainable mining policy. Several BGR projects in the extractive resource sector in Africa showed huge potential from small-scale mining to advisory services to geological surveys. Siyan Malomo In his address, Siyan Malomo said that one of the pillars of the AMV was the setting up of geological and mining information systems with the aim to develop a comprehensive knowledge of Africa’s mineral endowment. This would be achieved through the following actions: • Enhancing the capacity and role of national geological institutions • Improving resourcing of national geological survey institutions • Increasing regional mapping and exploration activities to upgrade mineral inventories and geo-scientific information base. John Kaninda, moderator of the session thanked the speakers for their informative deliveries and opened the floor for a debate. Discussions focused mainly on capacity building in geological mapping, as it is seen as they ingredient in any initiative to strengthen African states’ bargaining power when negotiating deals with foreign investors.
  • 29. 29 Summary of closing speeches Reinhard Bütikofer, a Member of the European Parliament, delivered the first remarks and commended the conference participants for the quality of their presentations and the robustness of the debates. He added that what was more important now was to take the steps to implement the EU – Africa partnership with a view to a “win-win” situation. Heinz Zourek, Director General, DG Enterprise and Industry, delivered the final closing remarks. In his remarks, Heinz Zourek said that the EU was ready to act as Africa's partner to surmount these challenges so that African countries can take their place as world leaders. However, if African countries wanted the EU to act, they are required to use the framework which had been put in place within the Joint Africa-EU Strategy. He concluded by saying that it would be important not to forget the raw material-related activities – better governance, investment and infrastructure or geological knowledge and skills - when discussing and progressing practical co- operation programmes and projects.
  • 30. 30 Closing speech of Heinz Zourek, Director-General of DG Enterprise and Industry, European Commission Excellencies, Ladies and Gentlemen, I hope that you all found today’s discussions enriching and useful. And I would like to thank all the panellists and participants, without whom this would not have been possible. Your input is very much appreciated. I am also glad to see that the ambition that we demonstrated in organizing this conference has been justified. I shall not come back on the Commission's views on the issues discussed today. They are well known to you and you had today the opportunity to hear them again. I shall therefore not say much more on this. What I would like to come back to, however, is the feedback and fresh opinions that were heard here. I would also like to reflect on where we should go from here. Today has been about how development and mining can go hand-in-hand so that we can foster broad-based growth for citizens. We are all aware of the problems, which have been associated with mining. However, we now need solutions to these problems. As such, I am glad that today's conference has focused on what we can do in the future. It is also clear that development and mining is a multi-facetted issue. As mining touches on a range of environmental, economic and social issues, it requires a comprehensive, coherent approach dealing with all aspects, from how the sector is governed, what physical infrastructure needs to be place, what geological skills and knowledge is required etc. While we have made some concrete proposals as to how the sector's management can be improved – for example in putting forward country-by-country reporting in the sector – this does not suffice on its own; we need to take action across the board. Yesterday’s expert sessions and today's high-level panels recognized the potential for the contribution of mineral resource wealth to development. The panellists underlined the importance of transparency in improving governance - both with regards of payments and contracts with responsible understanding of the need to balance the benefits of transparency against the cost of providing this information. Competitive and open tendering processes, transparency of contracts and strengthening administrative capacity of governments and parliaments in contract negotiations are crucial elements to improve governance. This process must necessarily involve the civil society and private sector, which can contribute to improving governance. On investment and infrastructure, it was stressed that mining is transforming Africa and that there is a new generation of projects in place. A lot of reflection has been already done on the African side on how to improve infrastructure. Europe can assist Africa in improving the investment potential of mining development corridors and enhance the policy and regulatory framework on issues such as environmental impacts of mining. Europe also has a strong experience in corporate social responsibility and a good area of co-operation could include transferring of such approaches to state mining companies. SMEs and small scale mining companies could be used as avenues for increasing the local content and diversify mining supply chains. On geological knowledge and skills we have heard that the EU and AU should facilitate the exploration of mineral resources potential in Africa by fostering the co-operation between the European and African geological surveys and improving the capacity of the Organization of African Geological Surveys (OAGS). The importance of continuous training in this area and increasing own capacity of our African partners in providing this training were particularly underlined. Before you leave, I would like to leave you with one final thought. One thing that perhaps has not been given sufficient attention is the fact that the priority raw material action areas included in the Joint Africa-EU Strategy signed by Heads of States in 2010 were agreed as part of a partnership, where each partner benefits from the co-operation. It is no secret that the EU is a buyer of many industrial raw materials; we are interested in what major
  • 31. 31 raw material exporters have to sell, whether this comes from Canada, Australia, Chile or African countries, for example. But while countries such as Canada – and the citizens who live in these countries – have and continue to quite-rightly benefit enormously from being suppliers of raw materials, African countries and their people have not always done so. While this situation should and undoubtedly will change in the coming years, there are a range of significant challenges to overcome first, challenges related to how to foster good natural resource governance, how to promote investments and having the right infrastructure in place, and finally how to ensure the right geological knowledge and skills are available. The EU is ready to act as Africa's partner to surmount these challenges so that African countries can take their place as world leaders alongside these other countries. Finally, one thing to remember for our African friends: If you want the EU to act, you should use the framework, which we have put in place within the Joint Africa-EU Strategy. In particular, it would be important not to forget the raw material-related activities – better governance, investment and infrastructure or geological knowledge and skills - when discussing and progressing practical co-operation programs and projects. Thank you for your attention.