we present the characteritics of extractive mining industry in the context of poor and emerging countries what is especially valid for African countries

1. Dr. Belkacem Touahri, Independant Senior Consultant
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By the expression « Mining Industry » , we mean the activities which include mining research (i.e. mineral
recognition and exploration including feasabiliy studies) development (i.e. engineering and construction),
extraction of ore and its beneficiation and finally marketing and the sale of the product to the consumer.

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The exploration and development of mineral deposits are preliminary investigations to
extraction and beneficiation. The income from these investigations if they lead to the
confirmation of an economically ore deposit, can be very important especially if there is
convergence between low production cost, high quality merchant product and favorable sales
price conditions.
For a mining company, putting in production a new ore deposit lead to increase its profits and
therefore its growth
For the local community and the government, it means :
1. direct & indirect employment often well paid ;
2. benefit from new infrastructures (roads, energy, water supply), catalysts for socio-
economic development;
3. increase of the tax revenues of the government who will then have resources to finance
social priority needs : health, education and to fight against poverty.

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Mining activities are littered with many risks.
For the local communities and the governments, and in particular, in the extraction and
beneficiation step, the risks come from the damage to the environment and a disturbance of the
community balance by the influx of a new population (foreigners and from other parts of the
country).
These benefits may outweigh the advantages of mining if:
a. The major part of the employment goes to foreigners;
b. The new tax revenues don’t benefit sufficiently to the local community or if the
government does not use them wisely;
c. and finally, if the damage to the environment is serious and can only be eliminated
with difficulty or significantly reduced.

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The object of mining industry is fundamentaly a mineral ore deposit which is the result of
natural phenomenas linked to the geological evolution of its area of localization. These
phnomenans have positive or negative implications on the ore deposit and its
mineralization.
The conduct of the research and extraction operations is done under conditions often with
difficulties related to the geological framework, the relief, the climate and the state or the
lack of infrastructures.
These conditions are are identifiable to as many risks for some unpredictable as the holding of
the grounds and the weather variations to which the activity is subjected.
The major risk, however, is that associated with the degree of uncertainty on resource
valuation at the exploration and feasibility stage, as it is the basic decision-making instrument.

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In addition to these nature-related situations are those linked to often unpredictable
variations in political and economic contexts: political and regulatory instability, insecurity
linked to community reactions, currency fluctuations and fluctuations in supply and demand
that control price and therefore income.
More than any other activity, the maturation of a mining project from the initial stage of
mining research to that of the decision to invest is long, costly and littered with risks that the
project will not succeed. It is not uncommon for to wait up to 10 years for a project to reach a
decision to invest (present examples are in Ethiopia and Eritrea for the potash projects which
have lasted more than ten years).
It is therefore very important to follow with caution and professionalism the step by step
process that could lead to the start of production. This approach makes it possible to take
major decisions in time such as giving up (thus minimizing the loss) or continuing (thus
increasing the financial stake).

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Mining industry structure can be represented through 3 phases :
1st phase : Mining research
It includes a set of operations, the last being the realization of feasibility studies
The step-by-step realization of the operations allows the identification of a deposit then the
confirmation of the possibility of its exploitation under economic conditions and financial profitability
which satisfy the investor. These operations, which constitute mining research, are carried out step by
step after the examination of previous knowledge (essentially a study of the geological documentation)
that makes it possible to select a perimeter an area on which the operations are carried in two stages
1st stage : Recognition,
2nd stage : Exploration which includes 3 steps :
1st step : preliminary exploration (at the end, it is usual to carry a scooping study or a
preliminary feasability study)
2nd step : detailed exploration
3rd step : fesability studies and environmental studies
The conclusion of this 2nd stage is to take the decision to invest for industrial exploitation

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2nd phase : The development of the ore deposit is the construction of the industrial production complex
of production. It includes:
a. Main access to the site, and brought of energy and water
b. Internal infrastructures : secondary access, electrical installations and air compression,
maintenance workshop, and other commodities;
c. Main access to the ore (mine shaft for example)
d. Preparatory works which delineate the extraction blocks;
e. Building of the beneficiation installation or plant.
3rd phase : Exploitation consists of extracting the ore, manufacturing the commercial product and its
marketing. The commercial product is a concentrate (i.e. concentrates of Pb, Zn, Cu etc ...or of heavy
mierals, ilmenite, zircon, rubis) or a metal form (mercury, gold, silver, diamond) or a purified rock (kaolin,
diatomite, perlite, feldspar, bentonite ...)
Downstream of the extractive mining industry come the processing industries (manufacturing of final
products to comsumption): metallurgy, cement, ceramics, glass, paints, paper, pigments, plastics, etc. ......

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1. In the regulation of most countries and in the practice of companies, bankable feasibility study
and environmental studies are included in the exploration phase
2. International practice requires:
 compliance of field works, laboratory analysis and reporting with an international
standard (eg Australian JORC or Canadian 43-101).
 certification of completion of work and reporting by a neutral qualified party.
The application of an international standard and the certification by a neutral qualified party are a
guarantee to all parts :
 the government which granted the mining lease,
 the company owners,
 and the funders (investors, banks)

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1- THE RISK RELATED TO GEOLOGICAL FACTORS is critical by the most crucial question posed : Is the
geological context favorable for the formation and localization of an economically exploitable mineral
concentration in quantity and quality?
The geological risk is related to the probability and degree to which the actual mineral concentration (in
quantity and quality) differs from what was expected at the time of making the decision to initiate
exploration or thereafter to the decision making of to develop the deposit to production.
In other words, what is the probability :
(1) that a mineral deposit may exist in a region selected for initial recognition?
(2) to confirm the existence of an economically exploitable concentration in the next stage of
exploration?
(3) to confirm during mining the quantity and grade of the ore as planned at the end of the
feasibility study?

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2- THE RISK RELATED TO TECHNICAL FACTORS: Can the ore be extracted and processed using
conventional (known) technologies or known but more elaborate (therefore expensive)
technologies, or which will only be developed in the future?
In other words, what is the probability and degree of recovery of the merchantable product (s)
after ore processing compared to what was expected from the feasibility study.
This risk is related to technical problems and possible complications that may be encountered
during extraction, processing or refining ...

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This fundamental
approach helps to
minimize the risks
associated to the
deposit.
It illustrates the step-
by-step evolution of
exploration of a
mineral concentration
in order to evaluate
both the geological,
mining and technical
conditions of a deposit
and its economic and
financial exploitability.

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