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transparency mining

African Countries Must

Renegotiate for Fair Mining

Deals By Socrates Mbamalu

he paradox of plenty is a reality for many officials to resign
African countries. There’s an abundance over the outcome John Magufuli
Tof natural resources such as oil, gas of an investigation Tanzanian President
and minerals, but there hasn’t been much conducted into the
economic growth and development for many mining sector.
countries. The natural resources abundant in The Tanzanian
most African countries tend to benefit not the g o v e r nm e n t
communities and countries within which the confiscated diamonds
minerals are extracted. Tanzania’s President worth $15 million. The
John Magufuli has started the process of diamonds were being
renegotiating the mining contracts his country exported to Antwerp,
has with various mining companies. Other Belgium. The Tanzania
African countries need to borrow a leaf out of government claimed
Tanzania’s book.
the diamonds were
undervalued and
placed the value of
The resource curse, also known as the diamonds at $29.5
the paradox of plenty, is a reality million.
for many African countries. The The Tanzanian
term refers to the paradox that government plans to
countries with an abundance increase the ownership
of natural resources such as oil of the mines to 50%.
and certain minerals tend to The story of the
have less economic growth and Tanzanian mining
worse development outcomes industry is no different
from what happens in
than countries with fewer natural many places in Africa.
resources, for various reasons. The Most foreign mining
natural resources abundant in most companies come to
African countries tend to benefit the continent and have industries in Africa is a fundamental issue,
not the communities and countries ownership of more than 70% of the mines. which needs to be addressed. There needs to
within which the minerals are found Tanzania’s Finance and Planning Minister, be transparency, and legislation enacted to
and extracted. Phillip Mpango said “Tanzania is likely losing ensure that extractive and trading companies
more than $46 million each year from the across the continent are more transparent
export of under-cleared diamonds through this with their payments for minerals.
It is concerning to note that many of the mining airport.” It is concerning to note that Zambia is Africa’s
deals on the continent benefit the American,
European and Asian companies operating Zimbabwe’s Finance Minister Patrick second largest producer of copper yet one
of the poorest countries on the continent.
Chinamasa this year told Zeina Badawi on the
in the various communities more than they
benefit African people. The resources should BBC programme Hardtalk that the missing In 2004, the Konkola Copper Mine (KCM)
was sold to Vedanta Resources at a cost of
$15 billion from Marange diamonds was a
be a blessing for the African countries and
communities. Recently, Tanzania’s President result of “trade mispricing”. Trade mispricing US$25million from a sale price of US$400
million. The Zambian government and people
has reportedly been costing Africa billions
John Magufuli ordered a review of a Petra
Diamonds Ltd contract. Petra Diamonds of dollars. While not exonerating political were ripped off by the Vedanta Resources, an
Indian company. The Konkola Copper Mine is
figures alleged to have benefitted from corrupt
owns 75% of the mines while the Tanzanian
government owns 25%. Magufuli asked public deals in the mining industry, the issue of the largest copper mine in Africa.
trade misplacing in the oil, gas, and minerals
AFRICAN POWER Mining & Oil Review Vol 21, Issue 20, 2017 | 51