African nations sense upper hand in minerals stand-off

DRC, Tanzania pose toughest challenge

11 February 2019 | Sakenuus
Barbara Lewis and Joe Bavier - African nations with rich reserves of copper and cobalt needed for the shift to electric vehicles sense they have the upper hand in negotiations with mining companies that are struggling to secure better terms.

Copper and cobalt reserves are giving nations such as Zambia and Democratic Republic of Congo confidence because of the difficulty in finding supplies elsewhere to meet the expected surge in demand. This has emboldened them to seek higher tax revenues from foreign mining companies.

Mark Bristow, CEO of the newly enlarged Barrick Gold, emerged this week as the big miners' most prominent voice, holding meeting after meeting with mining ministers, culminating in a grand dinner on Wednesday night.

But Bristow declined to be drawn on when he might get a deal in the toughest jurisdictions of Democratic Republic of Congo and Tanzania, whose governments are demanding terms the international mining companies say are untenable.

"You can't negotiate with a deadline, especially in Africa," he told reporters.

The challenge, he said, was to avoid undoing decades of progress as international lenders start calling in loan repayments, piling the pressure on nations, such as indebted Zambia, and populist governments make sweeping promises to their electorates.

"Everyone has a responsibility to ensure the progress we have seen since the end of the Cold War across Sub-Saharan Africa," he told Reuters.

"One of the biggest challenges right round the globe is populism and people hanging on to power by promising things that are improbable when it comes to delivering. That puts a lot of stress on a lot of things."

Bristow has however made clear he is prepared to get rid of less profitable assets, which may be in Africa.

After Zambia announced new mining taxes, Barrick said it was considering all options for its Lumwana copper mine there because the changes would make it hard to generate adequate returns.

New taxes

Zambia says it is open to discussions but will enforce the new taxes to maximise earnings from its own resources.

While Bristow has been the big miners' most audible representative in Cape Town, nations rich in mineral resources were represented by Nana Akufo-Addo, president of Ghana, Africa's biggest gold producer after South Africa.

He said countries such as his had "come of age" and international companies should no longer expect to be given unusual tax advantages in return for the right to mine.

"The people of Africa do not have to be poor for others to be rich," he said.

But as far as the miners are concerned, Democratic Republic of Congo and Tanzania are demanding far too much.

Gold miner Acacia, majority-owned by Barrick, is in talks with the Tanzanian government over a US$190 billion tax claim.

Tanzania sent no senior officials to the Indaba. And Congo stuck to its guns.


On stage with Bristow during a panel on Congo's new mining code, the secretary-general for mines, Joseph Ikoli, said that, while the government was always open to discussions with its partners, the law, now approved, cannot be changed.

Doing so would require sending it back to parliament, and analysts believe the law's popularity with the Congolese people make rolling it back politically unpalatable.

In the light of these difficulties, miners said it would take years to re-establish trust, and investment would be driven away for decades. Industry would look for ways to make electric vehicles without cobalt, for example, because so much of it is concentrated in Congo.

"If you look at a map of Africa, the mines are not necessarily built where the best geology is," said Daniel Betts, managing director of west African gold miner Hummingbird. Instead, they tend to be built where there is political stability.

Many of the African governments remain confident, however, that companies will not go elsewhere, especially once they have already invested heavily in mines.

‘Cry babies’

Asked about foreign companies' complaints that their business would be damaged by Zambia's tax changes, Zambia's mining minister Richard Musukwa was dismissive.

"They are always cry babies," he said.

However, other African nations in need of the kind of infrastructure development and employment big corporations can provide are offering tempting terms.

Ethiopia, for example, is rolling out pro-business reforms after prime minister Abiy Ahmed swept into office nearly a year ago.

The nation's mines and petroleum minister Samuel Urkato said promoting the mining sector had become a priority and indicated further tax incentives were likely. – Nampa/Reuters



NSFAF sluit ooreenkoms met Bank Windhoek

2 dae gelede | Onderwys

Die Finansiële Hulpfonds vir Namibiese Studente (NSFAF) en Bank Windhoek het vandag ʼn ooreenkoms aangegaan vir ʼn nuwe stelsel waardeur geld aan kwalifiserende studente gestuur...

Chinees Dinsdag in hof ná werker se skietdood

2 dae gelede | Misdaad

Die man wat gister na bewering deur sy Chinese werknemer in die Andara-nedersetting doodgeskiet is, is as mnr. Andreas Hausiku (32) geïdentifiseer.Hausiku was ‘n inwoner...

Twintig jaar tronkstraf vir verkragter

2 dae gelede | Howe

‘n 34-jarige man van Otjiwarongo is gister 20 jaar tronkstraf opgelê nadat hy skuldig bevind is aan die verkragting van ‘n minderjarige. Die dogter was...

Taking charge

2 dae gelede | Mense

Mariselle Stofberg Anthea van Heerden decided to take a leap of faith to start her own company in Windhoek.She is the managing director and...

Moontlike deurbraak

2 dae gelede | Misdaad

Denver KistingDie man wat gisteroggend weens Maandag se bloedbad op Arandis aangekeer is, het glo vir etlike ure geweier om met die polisie saam te...

Só staan sake in die Namibiese huis

2 dae gelede | Regering

Denver KistingPres. Hage Geingob het gistermiddag gesê sy boodskap van “welvaart vir almal” moenie verkeerd verstaan word nie.Volgens hom was die bedoeling nooit om oordaad...

Kabajani blossoms at GIPF

2 dae gelede | Mense

Michelline Nawatises Annette Likeleli Kabajani is a holder of a bachelor’s degree from the University of Namibia (Unam). She has also attained several management and...

Baking a name for herself!

2 dae gelede | Mense

Ester Kamati At the age of 28, Alma Tangi Nakanduungileh is climbing the entrepreneurial ladder and adding sweetness to her clients’ lives. A qualified...

A passion to unlock potential

2 dae gelede | Mense

Ester KamatiJustina Mulokoshi is a chartered accountant (CA) at PwC who has big dreams and is constantly on the lookout for new ways to improve...