Role of Mining in Africa

Africa is endowed with a lot of precious minerals that are essential in the manufacture of many of today’s everyday materials which we depend on. In this globalized economy, demand for goods is ever increasing hence the demand for more minerals. Africa can exploit this global trend. Between 2000 and 2011, 15% the world’s mining investment and expenditure capital was spent in Africa as shown in a report done by Klynveld Peat Marwick Goerdeler [KPMG] International.

Mining is an important foreign exchange earner, for example in Namibia, mining accounts for half of the revenues earned from export while, in Zambia, exports form Copper alone account for 80% of their export earnings (KPMG, 2013). In terms of employment and in relation to South Africa, the mining industry created more than 500,000 jobs directly in the year 2010. There was multiplier effect on other sub-sectors of the economy like transport, catering, finance, insurance and electricity, resulting in the creation of an additional 800,000 jobs. Furthermore, most of the revenue collected from this industry is spent locally which future boosts the economy. In order to fully exploit the natural resources available in this continent, there is a drive by national governments to construct new or repair the dilapidated infrastructure so as to facilitate the movement of raw materials. This, in effect will mean that there will be efficient transportation which will not only support the mining sector but the rest of the economy. Mining sector is also attracting more foreign investors especially from china whose economy is dependent on these minerals hence a net positive increase in capital flow to Africa. This will help to offset the balance of payment in the continent.

Mining also plays a negative role in Africa, for example, a study done by Gandiwa and Gandiwa with the aim of determining the effects of gold mining on biodiversity conservation; found that mining resulted to land degradation which was derelict and barren. Furthermore, biodiversity was negatively affected, and there was water pollution because of the mines.

Mining in Africa can play an increasingly positive role if, there is a fair profit sharing mechanism, enacting laws that are just and sustainable, setting up a stable legal system and ensuring political stability.

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