Research: Alternative Raw Materials Policy for Africa

The Delft University of Technology

Africa in Motion

09 September 2014

Conducted by: David Lau (TUDelft)

Supervision: Prof. Dr.Ir Jack Voncken (TUDelft)

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Table of contents
Foreword

1. Introduction------------------------------------------------------------------------------4
2. Minerals-----------------------------------------------------------------------------------5
3. Mineral inventory for Africa----------------------------------------------------------6
4. Adding value in Africa-----------------------------------------------------------------21
5. Case study south Africa vs Zimbabwe vs Botswana---------------------------28
6. Feasibility for Africa-------------------------------------------------------------------31
7. Short answers to the research questions----------------------------------------32
8. Conclusion & recommendations---------------------------------------------------33

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Foreword

Africa is the origin of 30% of the raw materials that the world economy revolves around. This includes
agricultural commodities such as coffee, cocoa, rubber and timber and minerals such as diamonds,
bauxite, phosphates, gold, copper, cobalt, coltan, uranium and other rare minerals. At present these
raw materials are exported (largely) unprocessed from Africa to Europe, China and other countries for
further processing.
More investment in African processing capacity is needed particular to produce semi-finished
products that can be exported for final processing in different other countries. In particular, minerals
deserve particular attention because their market chain/produce chain/chain of produce are often
not very visible or well-known.
With this report we aim to contribute to establish a good background for this view and find answers
to the following questions:
1. Which semi-finished products based on raw materials from Africa are further processed in
the Netherlands (and the European Union more generally)
2. Which companies and countries are involved?
3. Which political and institutional networks and institutions are relevant?
4. In which domain (raw materials and semi-finished products) is most promising to encourage
investment and implementation?
Based on existing literature and interviews with experts from the academic world as well as from the
industry and policy advisors, this report will prepare an overview of potential raw materials and
identify the most promising among them that may contribute to economic development in Africa. It
will also cover the implications of the current mineral policies and by verge of comparison, alternatve
policies will be depicted.

Acknowledgements

This report was prepared by the Delft University of Technology in conjunction with the Wageningen
University and research Center with the colaboration of Africa in Motion. The work was supervised
by professor Dr.Ir. Jack Voncken (TuDelf) and Max Kofi (Africa in Motion).

Several members of the ISG International study group offered their contribution to this report and
deserve special mention. There are Fui Tsikata of Reindorf Chambers, who also was chief coordinator
for the ISG work, professor Campbell of the University of Quebec, Canada, as well as professor
David Beylard for his inventory. The instituto geologico de Angola, Geological survey of Botswana,
Zimbabwe and Zambia should by no means be forgotten.
A number of people from Dutch companies also contributed to the chapters of this report by being
so kind to arrange time from their busy schedule in order to discuss the main questions of this
report. Participants at both the consultative and validation workshops comprised a number of
stakeholders including regional economic communities, government policy makers, civil society, the
prvate sector and academia. While the individual participants are too numerous to list, their
individual and collective contributions are no less appreciated.

Thanks are also addressed to the Angolan minister of Geology Francisco Queiroz and his team for his
review and input, making it possible to consult their database and so the completion f this report.

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 1. Introduction
Minerals are used in everyday life, as construction materials (crushed rock, sand and gravel) for
infrastructure, buildings, and roads, and for industrial purposes (e.g. metals, lime, kaolin, silica sand,
talc) in the production of steel, cars, computers, medicines, human and animal food stuffs and
fertilizers, to name just a few key applications. The European mining industry has a long tradition, yet
today it is also among the continent’s most modern and most innovative industrial sectors.
Discovering new deposits, mining and ore dressing all require major emphasis on research and
development. Mining exploration, extraction and beneficiation are now supported by high-level
technologies. The industry also promotes advancements in the areas of environmental, health and
safety protection.

In September 20131 the European Commission published its new Communication “The raw materials
initiative — meeting our critical needs for growth and jobs in Europe”. Following its previous analysis
of the competitiveness of the sector DG Enterprise and the political and economic developments
around the world at the beginning of 2008 the EU realized that it needed to address this very
important issue at highest level in order to ensure security of raw material supply for its economic
growth. The industry of course welcomed this Initiative whole heartedly since in the past years a
whole array of legislative measures and the lack of public awareness in Europe had made access to
raw materials for the extractive industry as well as for the downstream industry more and more
difficult and at the best of times time consuming.

More than 30 years ago the Organization of African Unity, the precursor of the African Union (AU),
adopted the Lagos Plan of Action for the economic development of Africa. The plan presented
challenges and potential paths for economic growth and development. Concerned about these
continuing challenges, the meeting in February 2007 under the auspices of the United Nations
economic commission for Africa (UNECA) and the African Development Bank (AfDB). The theme of
that big table was ‘Managing Africa’s Natural Resources for growth and poverty reduction’. It was
attended by ministers and senior officials from 11 mineral rich African countries and representatives
of the African Union commission, among others. The ministers adopted the Africa Mining Vision
(AMV), advocating for ‘transparent, equitable and optimal exploitation of mineral resources’ to
achieve the envisaged ‘broad=based sustainable growth and socio-economic development’.

At their meeting held in Addis in February 2009, the AU Heads of state and government welcomed
the AV and requested the ‘AU Ministers in charge of Mineral Resources Development to develop a
concrete action plan for its realization’, acting in partnership with UNECA, AfDB, regional economic
communities and other stakeholders. They further called the International community and Africa’s
development partners to support the efforts of member states ‘towards enhancing the contributions
of the mineral resource to the achievement of the MDGs.

1.www.oefse.at/Downloads/publikationen/eu_raw_materials_BP8.pdf

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 2. Minerals

2.1 Geochemical considerations

It is traditional in the mining industry to divide metals into groups with special
names. These are:

a) Precious Metals - gold, silver, Platinum Group Elements or PGE (platinum Pt,
rhodium Rh, ruthenium Ru, iridium Ir, osmium Os, and palladium Pd)
b) Non-Ferrous Metals - copper, lead, zinc, tin, aluminium. The first four are also
known as base metals
c) Iron and Ferroalloy Metals - iron, manganese, nickel, chromium, molybdenum,
tungsten, vanadium, cobalt
d) Minor metals and related Non-metals – antimony, arsenic, beryllium, bismuth,
cadmium, magnesium, mercury, REE (elements La – Lu), selenium, tantalum,
tellurium, zirconium etc.
e) Fissionable Metals - uranium, thorium.

The European mining industry is fundamental for the continent's economic well-being. Consumption
of aggregates, industrial minerals and metals in Europe has grown rapidly over the past decade.
Today, Europe is almost self-sufficient in producing many industrial minerals and aggregates.
However, it is a significant net-importer of most metals and metal ores.
Production by minerals:
Metal Mining:

Aluminium Antimony Bauxite Copper Gold

Iron Lead Manganese Nickel Platinum

Silver Titanium Tungsten Zinc

Industrial Minerals:

Asbestos Baryte Bentonite Diatomite Feldspar

Fluorspar Graphite Gypsum Kaolin Magnesite

Perlite Potash Salt Sulphur Talc

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Furthermore a list of strategic and critical raw materials has also been published containing:

Aluminium Rhenium Beryllium Tellurium Bentonite

Lithium Diatomite Nickel Graphite Molybdenum
Antimony Silica sand Borates Titanium Tantalum
Magnesite Feldspar Niobium Gypsum Germanium
Barytes Silver Chromium Tungsten Cobalt
Magnesium Fluorspar Perlite Indium Rare earths
Limestone Gallium Platinum group Iron ore Zinc
metals
Bauxite Talc Clays )and Kaolin) Vanadium Copper
Manganese
Strategic and critical raw materials. Source: European Commission (2010d)

China holds the monopoly on mineral exploration, production and distribution. China also holds the
most huge reserves of strategic minerals (90% control; highlighted in the figure above). Below we can
see the export of ferro-molybdenum from China to the world.

Exports of molybdenum and products, China.

3. Mineral inventory for Africa

Satellite remote sensing has enabled us to provide a complete inventory of the most important
mineral deposits in the world, located in 53 countries in Africa. In a second step, we present the
evaluation method which allowed us to quantify to 46,200 billion mining heritage of Africa.

3.1 The inventory

As stated earlier, Europe is almost self-sufficient in producing many industrial minerals and
aggregates. However, it is a significant net-importer of most metals and metal ores.
Many of those minerals are found in Africa as shown in the inventory below:

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 Source: David Beylard, le journal de la finance Africaine 2

1) manganese
When we interpret the satellite photos of the border region Moanda Gabon and the Republic of
Congo on the one hand, and the northwestern part of the DRC on the other hand, we find large
deposits of manganese in the region, we can estimate more than 500 million tons of ore over 45% of
content. Manganese ores, which are inventoried in this part of Africa, in the form of a surface crust
of ten meters thick at the base of which is formed the bed-rock of sandstone and black shales
containing only traces of manganese content of 0.01 to 0.003.

2
www.lesafriques.com/dossier-matieres-premieres/l-inventaire-des-plus-importants-gites-2.html?Itemid=308

In the border region of Franceville, which lies between Gabon and Congo, satellite photos capture
significant uranium deposits in the region Mounana.
In South Africa, the deposits of Postmasburg also contain important manganese ores.
Satellite photos capture also in Precambrian deposits Ouarzazate, in Morocco , volcanic series
characterized by traces of ryolithes, tuffs, ignimbrites and ash tuffs, some slots are filled manganese
ore are valued at more 800 000 tonnes of ore at a grade of 37-50% manganese.

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Another major manganese deposit is located in Jebel Guettara in the Algerian Sahara, and is valued
at over 200 million tonnes.
The satellite photos of Bou Arfa, Morocco, indicate significant manganese deposits of sedimentary
origin in dolomitic limestones of the Lias and those Chebket el Hamam, which is located in the
northeast of Columbus Bechar, Algeria. In Morocco, manganese deposits of Imini consist of oxides
lenses bathed in the sandstone or dolomitic limestones of the Cenomanian. Satellite photos deposits
of Algeria capture large deposits of manganese El Kahal Brezina, which is located in the Lutetian and
contains a mineral that displays a content of 17%. Finally, in the southern Eastern Desert of Egypt we
find deposits of manganese ore veins in Precambrian and Miocene continent.

What is manganese ore?

Manganese is a metal with very high value whose main function is to prepare alloy steel, of the
deoxidizing of the desulfurized and recarburer steel in blast furnaces to impart hardness and
toughness. The main uses of manganese steel, the manufacture of electric batteries, alloys and
chemicals.

2) copper, uranium, lead and zinc

The copper deposits of the Copperbelt, the region that includes the DRC and Zambia, contain ore of
exceptional quality. There are two different combinations of copper with a very high value chemicals
that are found nowhere else in the world.
This is the natural association Copper-cobalt-uranium (Cu-Co-U) and the Association of Copper-Lead-
Zinc (Cu-Pb-Zn). Deposits of minerals copper-cobalt-uranium are located in the border region of
Copperbelt, shared by the two countries. They affect mining areas Nchanga, Mufulira, Nkana and
Roan Antelope Zambia, as well as mining areas Kinsenda, Lubembe, the area of the star, the lower
part of the group and Katanga Kambove DRC .
Deposits of the association of copper-cobalt-uranium are located in the upper part of Katanga,
specifically group Kipushi Kakontwe and Kundelungu. They are characterized by a structure of
dolomitic limestone, filling a fault hydrothermal. The same typical deposits can also be identified in
areas of Mindouli and M'Fouti Congo in the area Mavoio Angola and in a large part of South Africa.
Mining areas Kundelungu, Shinkolobwe Kalongwe-Luishya, southeastern Katanga and Zimbabwe
contain uranium ores. They are characterized by sandstone, argillite, carbonate rocks, reef
stromatolites in benches.
When we analyze satellite photos of the Precambrian of Africa, we find that this area is home to
large deposits of copper characterized by large deposits of dolomitic limestone with stromatolites
and galena, particularly in the fields of Ouarzazate and 'Adoudounien, Morocco, in the system of
western Congo, Katanga in the group, which is located in the south-east of the DRC, and in the
border region Bushimaie between the center of the DRC and Angola, in the system Bembe in Angola,
in the area of Bunyoro and Bukoban East Africa and finally in the mining areas of Waterberg Matsap,
Transvaal, Otavi and Damara South Africa.
The satellite photos of the area Akjoujt, Mauritania, capture large deposits of copper. As well as the
mining area and Lambatara Nioro, Sudan. Ore deposits that are inventoried in this area are in the
aqueous, marine or lagoon environments very shallow depths.
In Madagascar there are also large deposits of uranium and thorium.
Satellite photos deposits Bou Beker and Touissit, Morocco, indicate significant beds and flies galena
in dolomitic limestones of the Lias. A Mibladen eg argentiferous galena is disseminated in limestone
Lias southeast, and also in an area of primary shale containing veins located Aouli, Morocco.

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Area Djebel Ressas, Tunisia, contains ore bodies that are located in the Liassic limestones.
In Niger, there impregnating the malachite in the intermediate continental mining area of Azelick.
In the province of Ogoja, Nigeria, are important veins and lenses of galena and sphalerite in the area
of the Lower Cretaceous.
In Egypt, the interpretation of satellite photos deposits N'Balla Hammam, who are in the Constantine
region, captures deposits that form an inter layer laminated to the roof of a bank of Miocene over
100 meters in length and 30 meters thick. In the eastern part of Egypt, specifically in the area of
Miocene calcareous sandstone, which extends to the shores of the Red Sea, El Shazly EM, we see
large deposits of calcareous sandstone and Miocene.
The Hoggar massif also contains significant uranium deposits in the southern part of Algeria.

What is copper?
Copper is a little oxidizable metal, like gold, it is a very good heat and electricity conductor. The main
uses of copper manufacturing son and electric cables, heat exchangers, substitutes aluminum, PVC,
stainless steel and fiber optics.

3) Iron
The largest deposits of oolitic iron continent are in the area of the Silurian near Fedhala to Keradid,
west of Settat and Ait Amar, Algeria and Mauritania border.
In the Lower Devonian of the southern flank of the syncline Tindouf in the Algerian Sahara, there are
huge deposits of iron oolitic the Gara Djebilet that contains more than 50% metal and whose
reserves are estimated at more than 2 billion tons of metal.
In Algeria, we also see large deposits of iron in the northern Rif, in contact with a rash coming and
Jurassic limestone. Clusters are hematite in Sebaba Liassic limestones, and Kristel Zaccar.
In the Aptian of Algeria, Ouenza, and Djebel Djérissa in Tunisia, we see large deposits of iron.
Tunisia deposits Jebel Ank contain oolitic iron ore located in an area of the Eocene.
Deposits of sedimentary iron Tiflet and Khenifra, Morocco, are in a lower Carboniferous area.

What is iron?
Iron is an oxidizable metal which is used exclusively in the steel industry. It is used in the automotive,
aviation, marine, construction and building, as well as public works.

4) Coal
These are areas where the geological structure is characterized by the Westphalian that contain large
deposits of coal, as Columbus Bechar-Kenadza in the Algerian Sahara, and Djerada Morocco.
In Colomb Bechar Basin-Kenadza, a first part of the Westphalian reaches over 2500 meters thick.
Another second part of the Westphalian reached more than 1500 meters and contains a flora of the
seat Bruay and coal seams. In the basin Abadla Sfaïa Kiksou, located in south-western Algeria, coal
reserves amount to over 100 million tonnes.
In north-eastern Morocco near Oujda, Westphalian contains several layers of top quality anthracite.
In Western Sahara, we find traces of Carboniferous plants, Westphalian in the Tindouf syncline in the
bowl Taoudéni and northern Mouydir.
In eastern DRC, specifically in Walikale and Lukuga, we observe large deposits of coal means
Carboniferous contains tillites.
Satellite photos of South Africa capture large deposits of Dwyka tillite too.

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Ecca deposits, the mining areas of the Transvaal, Natal and Pondoland, South Africa, formed shale
and tillite, and contain coal of exceptional quality.
The Ecca contains feldspathic sandstone, sandstone and shale. The average Ecca contains coal seams.
Coal deposits of Zimbabwe extend into the zimbabwéeno-Mozambican border areas, specifically in
the basin of Tete.
In the basins of the province of Katanga, in Lualaba in Luena and Lukuga, DRC, we are impressed by
the extent of coal reserves that we consider more than 1 billion tons!
Cretaceous zones of Nigeria include benches bituminous coal valued at over 100 million tonnes.
Finally, the satellite photos of Madagascar capture layers with a thickness of a few hundred meters
that contain coal reserves estimated at over 500 million tonnes Sakoa. In Madagascar, we also see
large deposits of tillite at Sakoa.

What is coal?
Coal is a solid fuel consisting mainly of carbon. It is used to produce electricity, coke in the steel
industry, cement and brick.

5) Phosphates lime
We find large deposits of phosphate of lime, which occupy the area of the Upper Cretaceous of
Egypt, a large area of Libya, a large area of Morocco, a large area of Gabon and a large area of Congo.
Huge deposits of phosphate of lime are located in the area of the Lower Eocene of Morocco, Algeria,
Tunisia and Senegal.

What is phosphate?
Phosphate is rich in phosphorus ore. It is used in the production of phosphate fertilizers,
manufacture of detergents, animal feed and in the production of phosphorus.

6) bauxites
Area Neocene terminal and Pliocene of West Africa, which has the following 15 countries: Senegal,
Mali, Niger, Nigeria, Burkina Faso, Benin, Togo, Ghana, Côte d'Ivoire, Liberia, Sierra Leone , Guinea,
Guinea Bissau, Gambia and Cape Verde, home to large deposits of bauxites.

What is bauxite?
The bauxite is a combination of several minerals, aluminum oxide hydrate, gibbsite, boehmite,
diaspore and the iron oxides. It is used in many industries and for many industrial uses, including the
manufacture of aluminum.

7) Gypsum and sulfur

The satellite photos of the area of the Miocene of Algeria and Egypt capture large deposits of gypsum
and sulfur.

What is sulfur?
Sulfur is a tabular and bipyramidal crystal. Its facies is massive, encrusting, dusty or stalactique. It is
used in many chemical industries.

8) Rock salt

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Satellite photos of Taza and Fez region reveal Triassic rock salt of a very high quality. Rock salt in
southern Algeria contain gypsum deposits.
Satellite photos of the Lower Cretaceous of Gabon capture large deposits of rock salt and potash.
In the Upper Cretaceous of northwestern Sahara, we find thick layers of salt GEMMs.

What is rock salt?

Rock salt is in crystalline form. The main uses of rock salt are jewelery, astronautics, aeronautics,
electronics, oil exploration, medicine, metallurgy, manufacture of cutting tools, optical lenses and
semiconductors.

9) The carbonatites
The interpretation of satellite photos Jombo Mrima Kenya captures ore syenite, carbonatite,
manganese, columbium and rare earths.
Uganda deposits Ring Dyke contain nepheline syenite, carbonatite with large reserves of apatite and
pyrochlore.
Tanzania Mbeya deposits and Panda Hill rocks contain pyrochlore Nyasaland, as well Nkumwa Hill,
Zambia, in the Sabi Valley, Zimbabwe, Semarude in Bechuanaland in the Bushveld Transvaal , South
Africa and the eastern DRC.

What is the columbium tantalite?

Columbium tantalite is a refractory metal alloy, highly resistant to wear and deformation at high
temperature.
It is used in the production of machine tools with high added value for drilling, cutting tools,
electronics, the speed steels, special steels, military industries, automotive, powder of high purity ,
products with long filaments for lamps whose electrodes, electric furnaces, to needle printer,
pigmenting, lubricants, catalysts, in the manufacture of computers and telephones, etc..

10) Diamond
In areas of Lower Cretaceous continent, greenstone dykes and kimberlite pipes contain diamonds.
These fossil placers are located in the DRC and the sandstone Ndele Ubangi. We also observe
significant deposits of chimneys and dykes throughout the sub-region of Southern Africa, which
stretches from South Africa to Sudan: South Africa, Botswana, Zimbabwe, Angola, Namibia , Lesotho,
Swaziland, Mozambique, Malawi, Zambia, DRC, CAR and Sudan. These thirteen states have a
geological structure that is similar to the soil of Sierra Leone, Guinea and Liberia.

What is the diamond?

Diamond is a pure carbon which is in crystalline form extremely hard, very high refractive index to
light, thermal conductivity to fifteen times greater than that of silicon. The main uses of diamond
jewelery are, astronautics, aeronautics, electronics, oil exploration, medicine, metallurgy,
manufacture of cutting tools, optical lenses and semiconductors. Satellite photos of the Hoggar pick
diamond deposits in place Reggane, Algeria.

11) Gold
All gold deposits in Africa are in the area of the Middle Precambrian, which are countries such as
Guinea, Mali, Sierra Leone, Côte d'Ivoire, Ghana and Sudan, which have to huge outcrops of deposits
in a structure called technically Birrimian.

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The satellite photos of these deposits capture zones of schists and quartzites that are larded veins
and veinlets of quartz gold. The richest gold veins are those of the Obuasi area and Tarkwaian,
Ghana, which contain an average of more than 39 grams of gold per tonne.
By analyzing satellite pictures of eluvial deposits and alluvial mining area Siguiri, Niger, we find that
this area is home to large deposits of gold.
The alluvium of the Ubangi in the border area between the Republic of Congo and the DRC and
extends to Gabon and Cameroon, also contain large deposits of gold.
Kibale deposits in the eastern DRC, specifically in the eastern province, Kilo and Moto contain
veinlets and veins of auriferous quartz, granite, granitic batholith, silver and ores sulphide.
It also identifies important gold deposits in the eastern part of Africa, including Somalia, Sudan,
Kenya and Tanzania. The interpretation of satellite photos of Zimbabwe and fossil placers of the
Witwatersrand also captures significant gold deposits.
Madagascar also has large deposits of gold in the auriferous quartz veins that are in the system and
Graphite mining area Vohibory of Madagascar.
Finally, the satellites of the Hoggar region and area photos that separates the southern borders of
Algeria cap extension of important gold deposits in Mali.

What is gold?
Gold is a precious metal heavy, malleable and unalterable. It is also a very good heat and electricity
conductor. Its main uses are jewelery, jewelery, lamps, making official coins and medals, electronics,
dentistry and various industries.

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Africa’s mineral resources

Source: Africa mineral resource specialists Inc.

3.2 Quantity available

The international metal and mineral markets follow a cyclical pattern based on supply and
demand. From the beginning of the present century, a strong and unforeseen surge in demand,
essentially driven by strong growth in emerging economies, led
to a tripling of metal prices between 2002 and 2008. In particular China accounted for more
than 50% of the growth in world consumption of industrial metals between 2002 and 2005.
While the current effects of the financial crisis are leading to a slowdown of the growth of
global demand for raw materials, it is expected that the growth levels of emerging countries in the
future will maintain high pressure on raw materials demand. While exploration
Expenditure has recently been increasing , the speed and scale of the
increase in demand is generally expected to result in supply lagging behind demand, a
phenomenon described by economists as a super cycle.

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From a technical point of view, the whole world can be powered by sustainable energy sources in
2030. The energy problem would be resolved, but a new problem comes into play. The problem is
not the availability of energy sources (sun, wind, tide , geothermal etc.). It relies on the
availability/quantity of minerals needed to harvest that energy.
The plan is to power the world with:
50% windpower (3,8 million windturbines of 5Mw)
40% Solar power (including solar roof tops, 1.7million roof systems and concentrated solar power
plants)- 49 000 concentrated solar power plants + 40 000 solar power plants.
10%: hydroelectric power (900 hydropower plant), 5350 geothermal power plants + 490 000 tide &
wave power.
The world builds 80million automobiles every year. During WWIII the USA produced over 300 000
airplanes and all of them demanded huge amount of raw materials/minerals.

3.3 Shareholders involvement in value chain

The use of raw materials underpins the economic performance of all EU Member States and most
industrial sectors and products. To a large extent, demand and use of the wide range of minerals
produced in and/or imported into the EU is strongly influenced by the business cycles of downstream
sectors (processing units). Overall the EU minerals trade balance is negative, showing a strong
dependence of the EU on imports for its raw material supply. The EU and the Member States are
currently revising its policies to increase the competitiveness of the EU minerals industry.
The EU metal mining sector is composed of around 250 enterprises, which include some of the major
multinational mining companies, which have their headquarters located in Europe. European
companies compete in a global market and the majority of metallic ores are imported to supply the
demand of the European economy. The EU metal mining sector accounts for some percentage of the
EU’s raw material needs, located in many but not all of the EU-27 countries, particularly in some of
the more Northern countries, such as Sweden and Finland, the Southern countries of Greece, Spain,
and Portugal and the new Member States like Poland, Romania and Bulgaria. New mines continue to
be developed and provide employment and economic growth in regions which would otherwise have
difficulty in attracting investment. Since metals, their ores and concentrates, are traded on
international markets, European metal mines face strong competition from large-scale, high-grade
overseas operations capable of producing metal ores and concentrates under low-cost competitive
conditions.
Emerging countries are also pursuing strategies towards resource-rich countries with the apparent
aim of securing privileged access to raw materials. For example, China and India have substantially
increased their economic engagement with Africa in recent years; in the case of China this includes
major infrastructure projects and active involvement in exploration and extraction activities in
countries such as Zambia (copper), Democratic Republic of Congo (copper, cobalt), South Africa (iron
ore), Zimbabwe (platinum) and Gabon, Equatorial Guinea and Cameroon (timber).
A comparison between the involved players in different areas of the world as well as the great lakes
region of Africa.

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Source: RMI

Emerging countries are also pursuing strategies towards resource-rich countries with the
apparent aim of securing privileged access to raw materials. For example, China and India
have substantially increased their economic engagement with Africa in recent years; in the
case of China this includes major infrastructure projects and active involvement in exploration and
extraction activities in countries such as Zambia (copper), Democratic Republic of Congo (copper,
cobalt), South Africa (iron ore), Zimbabwe (platinum) and Gabon, Equatorial Guinea and Cameroon
(timber).
Over 50% of major mineral reserves are located in countries with a per capita gross national
income of $10 per day or less. This creates new opportunities for these resource-rich
developing countries, particularly in Africa to significantly increase their national
income since many of them are still facing poverty or slow growth. However some of these
countries are facing violent conflicts, sometimes fuelled by competition for control of natural
resources and some lack of good governance, notably as regards the allocation of resource revenues.
Furthermore, these countries have often difficulties negotiating with foreign mining
Companies due to asymmetric information about the value of deposits and insufficient
administrative resources. In certain cases, questions have been raised about companies
practices with respect to environmental protection and labor rights, and in others, concerns
have arisen as to the impact on countries’ indebtedness of certain public-private contracts.

The main stages in the mineral value chain

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Source: Lydall, 2010

The United states produces a range of materials from strategic minerals, including warships, aircraft
and high tech devices and components. The US and its allies have relied on free market forces in
Southern Africa. However, U.S and allied industries may not always have access in the future and
may have to reduce output or even close.

Main uses of strategic metals and minerals

Antimony: Batteries, antifriction alloys, medicines, antiprotozoal drugs small arms, buckshot and
tracer ammunition; matches.

Chromium: Jet engines and gas turbines, cookware and cuttery; magnetic tape used in high
performance audio tape, high temperature refractory applications like blast furnaces, cement kilns.

Cobalt: Used in surgical instruments and hard metals for cutting tools and drills used in metal-working
and mining industries; prosthetic parts as hip and kneed replacements; batteries, adhesion of the steel
to rubber in steel-belted radial tires.

Copper: Piping, electrical applications, construction industry and household uses.

Gallium: Semiconductor use is now the primary industrial market for gallium, but new uses in alloys
and fuel cells continue to be discovered.

Germanium: Semiconductor material used in transistors and various other electronic devices. Its
major end uses are fiber-optic systems and infrared optics, but it is also used for polymerization
catalysts in electronics and in solar electric applications.

Indium: Liquid crystal displays (LCD) for televisions used for the manufacture of thin film solar cells
used in light-emitting diodes (LEDs) and laser diodes (LDs).

Lithium: Electric and hybrid car batteries as well as electronic devices batteries.

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Manganese: Standard and alkaline disposable dry cells and batteries: stainless steels: aluminum
alloys (ex: beverage cans).

Molybdenum: missile and aircraft parts; valuable catalyst in petroleum refining; filament material in
electrical applications alloying agent for ultra-high strength steels.

Nickel: Many industrial and consumer products, including stainless steel, magnets, coinage,
rechargeable batteries and special alloys.

Platinum: Jewelry, laboratory equipment, resistant thermometers, dentistry, catalytic converters,

many Palladium: Electronics including computers, mobile phones, multi-layer ceramic capacitors,
component plating, low voltage electrical contacts and SED/OLED/LCD televisions, fuel cells.

Rare earths: Automobiles, including hybrid vehicles, air conditioners, wind power generators,
fluorescent; lights, plasma screens, portable computers, hand-held electronic devices.

Rhenium: Jet engine parts, platinum-rhenium catalysts which are primarily used in making lead-free,
high-octane gasoline.

Silicon: Power transistors, the development of integrated circuits such as computers chips as well as
in construction industry as a principal constituent of natural stone, glass, concrete and cement.

Silver: Jewelry, high-value tableware utensils and currency coins, electrical contacts and conductors
mirrors and in catalysis of chemical reactions. Its components are used in photographic film.

Tantalum: electronic components mainly capacitors and high-power resistors, tools for metalworking
equipment and in the production of superalloys for jet engine components, chemical process
equipment, nuclear reactors and missile parts.

Titanium: Strong lightweight alloys for aerospace (jet engines, missile, and spacecraft), military,
industrial process (chemicals and petro-chemicals, desalination plants, pulp, and paper), automative,
agrifood, medical prostheses, orthopedic implants, dental and endodontic instruments and files,
dental implants, sporting goods, jewelry, mobile phones, and other applications.

Tungsten: Light bulb filaments, television tubes, x-ray tubes (as both the filament and target)
superalloys, and hard metals for cutting tools and drills used in metal-working and mining industries.

Vanadium: high speed tool steels used in surgical instruments and tools.

COUNTRY Precious Metals gemstones and Metallic Minerals Industrial Minerals

semi-precious stones

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 Phosphate, barite, kaolin,
bentonite, diatomite, feldspar, gypsum,
Algeria Gold, silver Mercury, wolframite, lead, zinc, pozzolana, salt, marble, rhyolite,
iron sulphur, fuller’s earth

Angola Diamonds, gold, silver, PGMs Uranium, nickel, chromium, Phosphate, granite, marble, salt,
bauxite, gypsum, lignite, mica, peat,
copper, lead, iron, zinc manganese

Benin Gold Marble

Botswana Diamonds, gold, platinum group, Copper, nickel, cobalt Coal, soda ash, salt
metals, semi-precious gemstones

Burkina Faso Gold, Lead, zinc, uranium Granite, marble, phosphate, pumice,
salt, manganese
Gold Tin, nickel, copper, cobalt, Phosphate, peat
Burundi niobium,
coltan, vanadium, tungsten
Gemstones, gold, diamonds Nickel, bauxite, iron., rutile, cobalt, Lignite, marble, mica, manganèse
Cameroon uranium, tantalite, tin

Cape Verde Gypsum, , pozzolana, salt

Central African Diamonds, gold Copper, tin, iron, uranium Clay, graphite, ilmenite, kyanite,
Republic lignite, monazite, quartz, salt,
manganese, rutile
Chad Gold Salt, soda ash

Comoros

Congo DR Diamonds, gold, silver Copper, zinc, tin, nickel, lead, Coal, manganese
coltan, cobalt, tungsten, niobium

Congo Brazzaville Diamonds, gold Copper, lead, zinc, iron, Phosphate, potash, manganese
magnesium
Cote d’Ivoire Gold, diamonds Cobalt, niobium coltan, nickel, Manganese
copper, iron, bauxite

Djibouti Copper Salt, basalt, gypsum

Egypt Gold Lead, tantalum, uranium, copper, Granite, marble, phosphate, gypsum,
tin , iron, zinc, magnesium sulphur, salt, soda ash, barite,
asbestos, bentonite, feldspar,
#uorspar, kaolin, manganese,
vermiculite,
coal
Equatorial Guinea Diamonds, gold Bauxite

Eritrea Gold, silver, Copper, lead, zinc, magnesium, Asbestos, feldspar, potash, talc,
iron, nickel basalt, granite, gypsum, kaolin,
marble, pumice, quartz, salt

Country Precious Metals gemstones and Metallic Minerals Industrial Minerals

semi-precious stones

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Ethiopia Gold, silver, platinum, gemstones Tantalum Salt, diatomite, feldspar, gypsum,
soda ash, granite, marble, pumice,
rhyolite, silica sand, kaolin
Gabon Gold, diamonds, PGMs Uranium, niobium, iron Phosphate, manganese

Gambia, The Titanium Rutile, silica sand

Ghana Gold, diamonds, silver Bauxite Salt, manganese

Guinea Gold, diamonds Bauxite, iron, uranium, Salt, graphite, manganese

copper,nickel

Guinea-Bissau Diamonds, gold Bauxite Granite, phosphate

Kenya Gemstones, gold Lead, zircon, iron, titanium Soda ash, fluorspar, diatomite,
salt, gypsum, mica, meerschaum,
kaolin

Lesotho Diamonds Uranium Dimension stone, bituminous

shale, coal

Liberia Diamonds, gold Iron

Libya Iron Gypsum, salt, sulphur

Madagascar Gemstones, diamonds, PGMs, gold Chromium, nickel, bauxite, copper, Coal, graphite, labradorite, quartz,
cobalt, titanium, uranium, iron agate, salt, gypsum, feldspar, mica,
marble, zircon, beryl

Malawi Gemstones Copper , nickel, titanium, uranium Coal, kaolin, phosphate, zircon

Mali Gold, diamonds, palladium, silver,
semi-precious stones
Copper, lead, lithium, nickel, tin,
iron, chromium, titanium,
tungsten,
uranium, niobium, thorium,
bauxite.
Granite, gypsum, kaolinite, marble,
phosphate, salt, manganese,
rutile, talc, zircon

Mauritania Gold, diamonds, semi-precious Iron, copper, chromite, titanium Gypsum, salt, sulphur
stones, PGMs

Morocco Gold, silver Lead, zinc, copper, nickel, tin, Phosphate, coal, barite, #uorspar,
uranium, mercury, cobalt, bentonite, salt, talc, fuller’s earth,
antimony, feldspar, gypsum, manganese
iron

Mozambique Gold, coal, gemstones, diamonds Bauxite, iron, niobium, tantalum, Diatomite, salt, quartz, Marble,
titanium, beryllium bentonite, rutile, zircon, ilemenite

Namibia Diamonds, gold, silver, gemstones Copper, lead, zinc, tin, uranium, Salt, #uorspar, granite, marble,
tantalite, sodalite, wollastonite, manganese

Niger Gold, silver, Uranium, tin Coal, gypsum, salt

Nigeria Gold, , gemstones, diamondS Tin, bauxite, copper, zinc, lead, Coal, barite, kaolin, feldspar, gypsum,
iron, tungsten granite, marble, soda ash,
talc, zircon, phosphate, rutile,
monazite, ilmenite,

Rwanda Gold, gemstones Tin, tungsten, tantalum, niobium, Pozzolana

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 columbium

Sao Tome E
Principe

Country Precious Metals gemstones and Metallic Minerals Industrial Minerals

semi-precious stones

Senegal Gold Iron , titanium Phosphate, salt, silica sand, rutile

Seychelles

Sierra Leone Diamonds, gold, PGMs, Bauxite, titanium Gypsum, salt, ilmenite, zircon

Somalia Gemstones, salt, gypsum

South Africa Gold, PGMs, platinum, diamonds, Lead, zinc, bauxite, copper, nickel,
gemstones, palladium iron, chromium, uranium,
vanadium,
titanium, cobalt, antimony
coal, phosphate, kyanite, vermiculite,
#uorspar, ilmenite, silicon,
cement, asbestos, bentonite, feldspar,
gypsum, kaolin, mica, manganese,
rutile, zircon,

Sudan Gold, silver, Chromite, Gypsum, marble, salt, mica, kaolin

Swaziland Gold, diamonds Coal, kaolin, talc, soapstone

Tanzania Gold, diamonds, gemstones, silver, Nickel, bauxite, copper, cobalt, Coal, phosphate, gypsum, pozzolana,
PGMs uranium soda ash,

Togo Diamonds, gold bauxite, zinc, iron Phosphate, gypsum, marble,

manganese,
rutile

Tunisia Silver Lead, zinc, iron Phosphate, #uorspar, zinc, barite,

gypsum, lime

Uganda Gold, diamonds Copper, tin, lead, nickel, cobalt, Gypsum, kaolin, salt, vermiculite,
tungsten, uranium, niobium, pozzolana, marble, soapstone
tantalum,
iron

Zambia Gemstones, diamonds, gold, silver Copper, zinc, tin, nickel, cobalt, Coal, sulphur, feldspar, barite
manganese, uranium

Zimbabwe Gold, diamonds, PGMs, palladium, Nickel, copper, iron, Chromium, Coal, lithium, vermiculite, phosphate,
platinum, , silver cobalt, uranium feldspar, graphite, kyanite,
perlite, mica, sulphur, talc, asbestos,
barite

Sources:
US Geological Survey (Minerals Yearbook): http://minerals.usgs.gov/minerals/pubs/country/africa.html#ag
Africa Atlas : http://www.unep.org/dewa/africa/AfricaAtlas/
MBendi Information Services : http://www.mbendi.com/indy/ming/af/p0005.htm
UNECA: http://knowledge.uneca.org/community-of-practice/nepad-regional-integration-and-trade/natural-resources-
managment/internationalstudy-
group-isg-to-review-africas-mining-codes/meetings-of-the-isg/fourth-meeting-of-the-isg-10-12-march-
2009/presentations/!e%20_Mineral% 20_Law_%20Policy_Framework%20_Algeria_Mauritania_Morocco.pdf
British Geological Survey 2009; World Mineral Production 2003 – 2007

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 4. Adding value in Africa

Africa should maximize the economic benefit from its raw materials by lengthening supply chains and
processing to add value rather than relying on exports. Metal processing units and industrial centers
are being stimulated in conjunction with infrastructure development. countries with rich deposits of
prized raw materials are already reaping benefits through the export market. But it argued far
greater benefits would be delivered if the continent worked together to use the commodities
internally and maximize job creation through the supply chain.

“Primary commodity production and exports entail huge forgone income through lack of value
addition, the export of jobs to countries that can add value, and exposure to high risks due to
dependence on exhaustible commodities and fluctuations in commodity demand and prices,” it said.
“Instead of relying on exports of raw materials, the continent should add value to its commodities to
promote sustained growth, jobs and economic transformation.”

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Figure 1: Existing metal processing plants (2011)

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Momentarily, the African continent is changing its industrial scope. Many industrial complexs are
being erected in southern Africa and in West Africa.

Figure 2: Industrial Centers in Africa

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African development corridor

Figure 2: Potential resource based African development Corridors

Figure 3: Major world tungsten processing plants

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http://www.infomine.com/investment/industrial-minerals/
http://pubs.usgs.gov/of/2013/1091/OFR2013-1091.pdf

Typical supply chain for DRC minerals sourcing the electronics industry

Source: Global witness

Economic costs involved

Reflecting the underlying market conditions, mining investments increased more than fourfold
between 2000 and 2010, reaching almost 80billion Usd annually, and the value of world metals
production rose at twice the rate of global GDP – a marked contrast with the stagnation in value of
the previous decade. The upshot is that Africa has been integrating into one of the most dynamic
sectors of world trade.
There is little evidence to suggest that a downturn is imminent. Some commentators maintain that
the world is still in the middle phase of a commodity ‘’super-cycle’’. Fuelled by high growth in
emerging markets and constraints on supply, prices are set to remain high. Compared with prices in
2005, which were already well above average levels for the 1990s, projected prices for 2025 are
round 20% higher for metals and minerals. 25% higher for energy commodities and over 90% higher
for precious metals.
Such projections should not be interpreted as cause for over-exuberance. Africa is still a relatively
minor player in inherently unpredictable global markets. Slower growth in China, global recession,
increased investment in new sources of supply- such as natural gas extracted by ‘’fracking’ –and new
technologies could fundamentally change increased exploration and rising foreign investment are
deepening Africa’s integration into global natural resource markets. In the energy sector, established
oil producers are expanding production. The US Geological Survey estimates that the coastal areas of
the Indian Ocean could hold extremely high gas reserves in addition to the 14.5 billion barrels of oil.
To put this figure in context, it exceeds the known reserves of the United Arab Emirates and
Venezuela. Africa’s share of world gold exports is rising. Countries such as Zambia and the
Democratic Republic of the Congo occupy a strategic place in world markets for copper and cobalt.

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More recently, there has been a global scramble to secure access to some of the world’s largest and
least developed iron ore deposits in Guinea, Liberia and Sierra Leone.
The revenue flows associated with Africa’s natural resources are potentially transformative. The IMF
estimates that revenue from Mozambique’s natural gas and coal could reach 3.5billion usd annually.
Iron exports from Guinea could generate over 1.6billion annually. Exported natural gas, gold and
other minerals could produce a revenue stream equivalent to 15% of Tanzania’s GDP.

Figuur 4: Mappimg Africa's natural resource wealth: selected countries and commodities

Global distribution of supply

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China does not only have a large demand but it is also an important producer of metals and minerals.
It is thus the most important mining country in the world. It is by far the largest producer of coal; it is
also the largest producer of gold, zinc, lead, tin and manganese. It is the second-largest producer of
iron ore. Its import dependency is high for copper and nickel, and growing for iron Ore and many
other metals. China is the sole supplier of rare earths and other metals and minerals used in highly
specialized technical applications for which there is no possibility of substitution.
Europe was an important mining region in the mid-19th century, but mineral production has declined
since. The EU now accounts for only some 3 per cent of global metal output. It remains self-sufficient
in construction minerals and is a major producer of dimension stone. Although Europe is a large
producer of several types of industrial minerals, it is a net importer of most of its requirements
!e proportion by value from different regions of the world is Africa, 11.5 per cent; Asia, 28.8 per cent;
Europe (excluding Russia, Belarus, Armenia, the Ukraine and Georgia), 2.6 per cent; European
Commonwealth of Independent States, 8.1 per cent; Latin America, 23.7 per cent; North America,
11.3 per cent; and Oceania, 14.0 per cent.
At current high levels of demand for copper, there is no stopping the present super cycle or the
demand boom from continuing at least for another $ve years, and most likely the rest of the decade,
unless global economic disaster hits. In the figure below, a commodity price trends is exposed.

Mineral, metal and oil commodity price trends 1980-2013

Figure 5: The rising tide of commodity markets

Although history does not repeat itself mechanically, it may well provide unforeseen events, such as
the recent global financial and economic crisis that temporarily upset the growth pattern of metal
demand. The crisis hit the continent’s mineral exporters, especially those in southern Africa. !e sharp
decline in commodity prices saw mines either close or put on maintenance regimes, with attendant
job losses. About 346,700 jobs were lost in 2008 in the Southern African Development Community
region alone.

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Long-term copper prices

Figure 6: Source: Raw Materials group

Investment in Africa - Growth opportunity for Western companies

Home to more than a third of the world's mineral resources and possessing the largest reserves in
the world of platinum, gold, diamonds and manganese, Africa represents a real opportunity and a
paradise for North-Americans, European and Chinese mining companies.
Between valid tax exemption up to 30 years and transfer of management of large mines to foreign
operators, the measures taken by African countries remain attractive to international investors
repatriate later much of their earnings back to their countries.
Thus, a number of international mining companies investing and operating in the continent. In
Ghana, for example, the relief granted (valid tax exemption beyond 20 years) by the State in favor of
companies led many companies to settle such cases Piesadon Normandy, Goldfields Limited and
Lasource. In Burkina Faso, the government has entrusted the management of its largest gold mine in
the Canadian company Lamgold. It has invested nearly $ 450 million in the mine which is expected to
bring nearly $ 500 million in royalties, taxes and other taxes. However, some African governments
have begun to revise mining contracts in order to benefit them in the benefits industry. In Liberia,
the government has completely revised its contract with Indian steel group Arcelor Mittal. The new
contract terminates among other clauses exempting the company from Liberian environmental laws
and respect for human rights, removed certain tax exemptions and requires compensation impacted
by mining populations.

5. Case study South Africa vs Zimbabwe vs Botswana

Mineral policies in the 3 countries will be explained, compared and evaluated.

South Africa
The country is the most important in regard to strategic minerals and challenges to the
free market. South Africa possesses 75% of the world’s platinum group metals (PGM) reserves, as
well as major deposits of chromium and manganese and produces a significant amount of
ferroalloys. South Africa also possesses other strategic minerals, including rare earth minerals,
fluorspar, and titanium sands. South Africa poses a growing challenge to the United States and its
allies of maintaining access to strategic minerals. Aggressive behavior is being exhibited by China and
Chinese companies in efforts to corner the market for a number of strategic minerals, particularly
manganese ore and ferroalloys. China is investing in South Africa’s mineral sector, aiming to secure
supply of specific commodities for which it has a shortage of reserves. Politicization of the mining

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industry is occurring in the form of black empowerment and pressures for the nationalization of
mines. Infrastructure bottlenecks are problematic and reduce the flow of strategic minerals. Acid
mine water in the greater Johannesburg region could pollute major mining operations, including
PGM mining. This is a growing issue that could prove catastrophic for mining in Gauteng Province and
North West Province where PGMs and other strategic minerals are mined.
Platinum Group Metals (PGMs)
South Africa dominates the production and export of PGMs, including platinum,
Palladium, and iridium as well as rhodium and ruthenium. PGMs have a number of unique
properties, such as resistance to high temperatures and ability to catalyze chemical reactions, which
make them irreplaceable in a wide range of applications. High world demand for platinum is driven
by two main uses: automotive catalytic convertors, which convert harmful emissions into relatively
inert exhaust, and jewelry (in oriental markets). Iridium is used in petroleum and automobiles.
Rhodium, ruthenium and other less common PGMs are experiencing production and supply
problems; they are difficult to extract and refine and are less prevalent, and more uses are found
daily. Ruthenium and iridium are in high demand because they provide vertical memory storage for
hard drives and lighting. Currently, there are no problems with the supply of platinum and palladium,
and the market is functioning well; recycling and below ground reserves guarantee continuing
supply.
World platinum suppliers, dominated by South Africa, struggle to satisfy global demand
for a metal that is virtually irreplaceable in several catalytic and industrial applications. Before
the economic downturn, the platinum price soared and in 2010 has rebounded from the recession.
South Africa’s Bushveld Complex contains some 75 percent of world platinum reserves,
occurring together with other PGMs and other valuable minerals such as cobalt. Mining in the
Bushveld Complex accounts for about 80 percent of world supply.
The supply of PGMs is affected by erratic power supply, poor mine safety, and slow
implementation of technologies in South Africa. Political pressures have slowed the conversion from
labor intensive to capital intensive mining. These bottlenecks often lead to periodic supply shortfalls
and price volatility, at times driving platinum spot prices to over 2,000 US dollars per ounce. It takes
more than seven years to bring a PGM mine on line, and the high elasticity of supply could mean
future shortages for the United States and its allies. It takes more than seven years to bring platinum
mine into production which means a high elasticity of supply.
Furthermore, the prospect of cobalt production from PGM mines is hampered by the chronic
electricity shortage in South Africa.
China already consumes a third of the world’s copper and 40% of its base metals and is looking for
more minerals to exploit. Driven by shortages in specific mineral commodities, Chinese mining
companies have been looking to find, buy, and develop mining projects in other countries, either on
their own or in joint ventures. They have prioritized the developing world, and in particular Africa.
Chinese investments in foreign mining assets totaled $50 billion over the past ten years
and a number of Chinese companies have already emerged as global mining majors. In 2009, China
was in the forefront of mining mergers and acquisitions across the world. Chinese investment in 2009
made up $17 billion, or 22 percent, of all global mining mergers and acquisitions and 30 percent of
the top ten deals by value.
Few of these Chinese groups are dedicated mining companies; most are vertically integrated
industrial complexes that do everything from exploration and mining through to manufacture.
China’s Shenhua Energy is the world’s fourth-largest mining company in terms of market
capitalization, after BHP Billiton, Vale, and Rio Tinto, and ahead of Anglo American and Xstrata. There
are now five Chinese companies in a list of the world’s top 40 mining companies in terms of market
capitalization.
Politicization of the Mining Industry
The free market and government taxation of mining profits have tended to provide optimal
conditions for states and industry and in maintaining a steady flow of minerals to meet demand.
However, politicization has occurred in the form of nationalization of the mining industry and the

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intervention of “black empowerment” companies, which have tended to disrupt the market and the
flow of minerals. The first wave of politicization occurred in the early 1970s with the nationalization
of mines and the creation of state mining companies. Zambia and Zaire (now the DRC) nationalized
copper/cobalt mines with suboptimal results and had to eventually reverse course after the copper
price collapsed. The Mugabe regime in Zimbabwe in the 2000s threatened nationalization of its PGM
mines and pushed forward black empowerment, and the state-owned mining company has entered
into joint ventures with foreign mining companies. Proposals for nationalization of the mines are
being pushed in South Africa and Namibia and may come to fruition. “Black economic
empowerment” (BEE), which has involved providing special advantages in the market place to black-
owned companies, is being implemented in South Africa, Namibia and Zimbabwe. The problem is
that many BEE firms and state-owned mining companies lack mining expertise and capital, which can
negatively affect production. If resulting production shortfalls are sustained over a long period of
time, supply of strategic minerals to the United States and its allies might be seriously constricted.
Also, BEE firms are being wooed by Chinese companies to enter into joint ventures, which could
mean that the supply of minerals might increasingly flow towards China and away from the United
States and its allies.
Political interference affects mining throughout the region. In states like Angola, Democratic Republic
of Congo, and Zimbabwe, the government is used by elites to intervene in mining in order to extract
rents and creates a disincentive to invest. This means a sub-optima supply of minerals, including
strategic minerals, and the “resource curse” for developing countries. Increasingly, Western
companies are being discouraged from engaging in corrupt practices. This opens the door to Chinese
companies, which are willing to engage no matter what the side costs. This means that strategic
minerals could increasingly be headed to China instead of the West.

The case of tanzanite

Idealism and the actual challenges don't always go hand in hand. It's easy to talk about self-reliance
but it's better to understand every individual case. And the study of the past is essential in this. The
past few months I've studied and assisted someone in the tanzanite business. Tanzanite is a
gemstone only found in Tanzania. Colonialism has paralized Tanzania as such that they almost only
export the rough stones to Europe, Asia and America for production.
Production is where the money really comes from and also where expertise is needed. While
Tanzania was in colonialism, in the West they were building the expertise and infrastructure to
produce the stones. Now that the country is independent they have continued sending the rocks to
the West, old habits die hard.
They can build such an industry but it's capital intensive, they can try to sell it in Europe but to get a
visa from Europe is to some impossible. They can try to produce them locally but prices aren't
competitive. A European can get a visa within a week to Tanzania.
There are so many advantages that the European has over the Tanzanian which is a competitive
advantage. But once you have studied that, you can as an African businessman decide to hire an
employee with a European passport. You produce in Tanzania and enjoy from cheaper labor costs
and send your employee to Europe to sell the goods. This way you break their strategy because you
produce cheaper but sell at equivalent prices. Competitive advantage restored.
We must not run away from the past but we must study it so that we become even more powerful.
The past, present and future are one by ignoring one aspect you ignore all.

6. Feasibility for Africa

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The past decade has witnessed not just a surge in foreign investment activity, but a proliferation of
actor. Companies active in Africa’s extractive sectors range from the multinational firms that
dominate petroleum and mining to smaller and more specialized regional actors. State and private
Chinese companies occupy an increasingly prominent role, as do firms from other emerging markets.
Many of the foreign investors operating in Africa are following international best practices, often in a
difficult operating environment. However, the Africa progress panel has identified two major areas of
concern. The first concerns the structure of investment activity. Foreign companies operating in
Africa make extensive use of offshore-registered companies and low-tax jurisdictions. In some cases,
multinational companies are also linked through their investment activities to complex webs of shell
companies. These arrangements come with weak public disclosure and extensive opportunities for
tax evasion. This is bad for efforts to strengthen transparency and accountability in Africa- and
jeopardizes the reputations of foreign investors.

The second area of concern relates to the linkages between foreign investment activity and local
markets. Extractive industries typically operate as low-value added enclaves with weak linkages to
local firm and employment markets.

Figure 7: Southern Africa supply chain infrastructure

Over a decade into the commodity boom, Africa is starting to export predominantly less unprocessed
raw mineral to import less consumer goods and agricultural commodities. This is a sustainable model
of development which has become the aim of the African Union.

7. Short answers to the research questions

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 1. Which semi-finished products based on raw materials from Africa are further processed in
the Netherlands (and the European Union more generally).
Aluminium, (rvs) steel, titanium, tungsten, copper, inconel, etc.

2. Which companies and countries are involved?

www.metaalbewerkingbedrijven.nl/bedrijven/
Many Dutch/european companies buy their materials (semi-finished) through intermediaries
such as MCB, Solomons-Metalen etc. Other multinationals are also involved and have share in
the mining activities.

Electronics companies ranked by progress on conflict minerals

Figure 8: Electronics companies ranked by progress on conflict minerals

http://ictsd.org/i/news/tni/100556/
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0025:FIN:en:PDF

3. Which political and institutional networks and institutions are relevant?

Africa: In Addis Ababa in June 2010 the Commission agreed with the African Union Commission (AUC)
to establish bilateral co-operation on raw materials and development issues based on the RMI (Raw
materials initiative) and the AUC's policy on mining and minerals, i.e. the 2009 'African Mining
Vision'. This co-operation will focus on three areas: governance, investment and geological
knowledge/skills.
Under the Africa-EU Joint Strategy 2011-2013, agreed at the Africa-EU Summit held in November
2010, actions on raw materials are foreseen under the Trade, Regional Economic Integration and
Infrastructure Partnership.
Europe: Transparency: Dodd-Frank act, Oeso-due diligence, VN ‘Ruggie guiding principles, extractive
industry
The Netherlands: World trade organisation (wto)

4. In which domain (raw materials and semi-finished products) is most promising to encourage
investment and implementation?

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 a. Precious metals: Gold, Silver, Platinum group elements (PGE=platinum, ruthenium, rubidium,
palladium)
b. Non-ferrouw metals: Copper, Lead, Zinc, tin, Aluminium.
c. Iron and Ferroalloy Metals - iron, manganese, nickel, chromium, molybdenum,
tungsten, vanadium, cobalt.
d. Minor metas and non-metals: Antimony, Arsenic, Beryllium, Bismuth, Cadmium, Magnesium,
Mercury, Rare earth elements (REE), Selenium, Tantalum, Tellurium, Zirconium, Phosphorous, etc.
e. Fissionable metals: Uranium, Thorium.

Semi-finished goods:
Steel, Talc, pigments (chalk, titaniumdioxide), salt(NaCl)
Tin: Electronics, automative, industrial equipment, construction.
Tantalum/Coltan: electronic capacitors, medical equipment, Aerospac components.
Tungsten/Wolframite: lighting, industrial machinery, metal wires, heating & welding applications.

5. Which political and institutional networks and institutions are relevant?

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0025:FIN:en:PDF

8. Conclusion & recommendations

The hypothesis that limited supply of resources and increasing levels of demand, increases chances
for conflict has been examined, and trends that may lead to future conflict have been identified. In
the long term, trends are unfavorable to the United States and its allies and their companies in
regard to sustainable access to strategic minerals in (Southern) Africa. The industrialization process in
China (and India) is around the halfway mark and is accelerating. For the next thirty years or so,
China (and India) will continue to demand increasing levels of mineral resources and will continue to
try to corner the market. Chinese companies, backed by the Chinese state, will continue to
aggressively seek Southern African mineral resources and will out-maneuver those of the United
States and its allies in the region. However, for the next five years, the supply of strategic minerals
will probably not be seriously affected, and market forces will continue to prevail.

In ten years, if trends hold, the United States and its allies could have problems accessing
manganese, chromium, and certain PGMs in South Africa. In twenty years, the United States and its
allies could experience problems gaining access to a broad range of minerals and could become
involved in a conflict with China, especially in South Africa, the DRC and Namibia. In fifty years, China
will be too powerful to dissuade from acting as it pleases in Southern Africa.

Given these trends, it seems that conflict is highly likely. In South Africa, DRC, and Namibia, the
United States and its allies are at a disadvantage. In South Africa, trends favor Chinese companies
which continue to aggressively pursue off-take agreements and joint ventures with BEE companies
and other firms. The looming possibility of nationalization and ANC overtures towards China threaten
the functioning of the free market and unfettered supply of strategic minerals and work against U.S.
and allied interests. Given increasing demand and limited supply, free market dynamics will not
always prevail the development. There is heavy Chinese activity in trade and infrastructure in
Namibia. Some experts point to China’s interest in developing a corridor from the DRC/Zambian
copper belt to the sea as the reason for its heavy engagement in Namibia. The building of a strategic
partnership with Namibia may not be possible, given the country’s relative lack of security problems

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and small size. A Millennium Challenge Corporation (MCC) grant, followed by others, may be the
most effective way to appeal to Namibia.

RECOMMENDATIONS
The United States and its allies are approaching a decisive moment in regard to the sustainability of
access to strategic minerals in Southern Africa and particularly South Africa, the DRC, Namibia, and
Zimbabwe. U.S. defense critical minerals will probably be affected. In South Africa, the DRC, Namibia
and Zimbabwe, the United States could decide to act to prevent access from eventually being slowed
and stopped or it could continue to place its faith in market forces.

The advice of one South African official for the United States to “be more aggressive like the
Chinese” is easier said than done. There are few U.S. mining companies in Southern Africa that might
work with the U.S. government, and laws regulate U.S. corporate behavior abroad.
One measure the United States could take is to assist South Africa in developing beneficiation. U.S.
aid could help to develop local mineral processing and metal manufacturing and assist South Africa in
developing sufficient electricity to power such ventures. In addition, the United States could
negotiate off-take agreements with South Africa and provide assistance to benefit local mining
communities. The United States could encourage American mining companies to reengage in South
Africa and work with Australian, Canadian and South African companies that are committed to the
free market. Also, the U.S. government could step up strategic communications, broadcasting
Chinese abuses and dissuading forces in the ANC and SWAPO from moving their governments closer
to China.
In order to shape the region to maintain the free market, there are a number of actions that
the United States and its allies might take. They might use diplomacy to build strategic
partnerships with the most important African countries. The potential for strategic partnerships
could be substantial in securing access to resources. The focus might be on forming partnerships with
the most strategic countries in terms of mineral resources. Most lie in Southern Africa where large
supplies of cobalt, platinum group metals (PGMs) and manganese and chromium for ferroalloys can
be found. In the case of strategic minerals, special attention must be paid to South Africa and the
DRC. The United States and its allies could develop military-to-military relationships with a number of
strategic African countries. The U.S. National Security Council, DOD and U.S. Africa Command
(AFRICOM) might develop contingencies to deal with the eventual prospect of resource cutoffs and
the possibility of conflict over strategic minerals. At issue is how U.S. agencies might adjust to the
forthcoming challenges.
The building of strategic partnerships is politically difficult, given the ANC and Angolan regime’s
rejection of AFRICOM during the standup process in 2007 and 2008. South Africa is the hegemon in
the region and must fully accept AFRICOM before military-to-military partnerships can be built
throughout the region. The United States also continues to apply sanctions against President Robert
Mugabe of Zimbabwe and his inner circle, which makes building partnerships with the Southern
African Development Community (SADC) difficult. In addition, there is some resistance to U.S. foreign
policy from the Kabila regime in the DRC; SWAPO in Namibia; and the dos Santos regime in Angola.
By 2020, U.S. intervention, including AFRICOM, might be needed to ensure sustained
U.S./allied access to strategic minerals, which means that the building of strategic partnerships in the
next decade is important. Building partnerships with Southern African countries will continue
to be difficult, and AFRICOM could become an increasingly important player in this challenging
process. The formulation and execution of a sound strategic communications plan is important to
slowing Chinese involvement and ensured sustained access to Southern African mineral resources. In
South Africa, the free market is resilient and will probably last the longest, while the DRC is the
weakest and could be easily drawn away from market principles. The United States government
needs to develop a plan of how to maintain access to strategic minerals. The Japanese government
already has identified the strategic minerals that are at risk, devised strategies and created agencies

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for maintaining access. The European Union has also developed a raw materials initiative as it was
worried about export restrictions and the difficulty in gaining access to strategic minerals.

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8: Ines Kurmies, Dr. Th. Seifert, http://www.geo.tu-
freiberg.de/oberseminar/os03_04/Ines%20Kurmies.pdf, Institute of Geology,University of Mining
and Technology Freiberg
9: http://en.wikipedia.org/wiki/Apatite
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11: Ir. P.A. Rossouw (1993), Deeldictaat Dagbouw MP3170, Faculteit der mijnbouw en
petroliumwinning, TU Delft.
12: Dr.-Ing. L. Rattman (2013), Lecture sheets mining engineering TA3060, RWTH Aachen
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14: Cheng, C.Y., Misra, V.N., Clough, J., Muni, R., 1999. Dephosphorisationof Western Australian iron
ore by hydrometallurgical process. Miner. Eng. 12, 1083-1092.
15: dhr. R. Chaigneau (2012), Lecture sheets: Size reduction, TU Delft
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