west african regional mining forum - world...

Resource-based African Development Strategy

RADSRADS

““Integrated MineralIntegrated Mineral--based based Growth & DevelopmentGrowth & Development””(RADS: Resource(RADS: Resource--Based African Development Strategy)Based African Development Strategy)

West African Regional West African Regional Mining ForumMining Forum

Dr Paul JourdanDr Paul JourdanAfDB, February, 2008AfDB, February, 2008


RADSRADS

1.1. ResourceResource--based exporter of minerals/metals based exporter of minerals/metals (oil & gas, gold, coal, iron ore & ferro(oil & gas, gold, coal, iron ore & ferro--alloys, alloys, bauxite/bauxite/aluminiumaluminium, copper, diamonds, etc.);, copper, diamonds, etc.);

2.2. ResourceResource--basedbased exporter of exporter of agri & agriagri & agri--based based commodities (cocoa, cotton, fruit & juices, commodities (cocoa, cotton, fruit & juices, sugar, grains, wood & paper/pulp, wool, meat, sugar, grains, wood & paper/pulp, wool, meat, fish, etc.); fish, etc.);

3.3. Insignificant exporter of manufactured goods; Insignificant exporter of manufactured goods; and and

4.4. Very weak HR base (skills) except for a few Very weak HR base (skills) except for a few niche competencies.niche competencies.

Africa:Africa:Start from what we are!Start from what we are!


RADSRADS

AfricaAfrica’’s Natural Resourcess Natural Resources• Agriculture

– Contributes 40% of African GDP % provides livelihood for 60% of population, but largest user of scarce water

– Enormous unrealised potential (low yields & only x% under cultivation)– But, agri-commodities exported without processing (beneficiation)

• Minerals– World’s top producer of numerous mineral commodities;– Has world’s greatest resources of many more;– Africa lacks systematic geo-survey: could be > resources;– But exported as ores, concs, metals: Need > beneficiation.

• Energy– Significant fossil fuels (oil, gas and coal) – Large biomass and bio-fuels potential (ethanol, bio-diesel)– Massive hydro-electric potential (Inga 45GW, Congo River 200GW)

• Forestry– 22% of African land is forested (650m hectares= 17% of world total);– Deforestation: Africa’s net change highest globally = -0.78% p.a;– Huge silviculture potential, but exported as logs/chips: need > bene.

• Fishing– Decline in catch rate (international poaching! over-harvesting);– 68% of marine protected areas under threat;– Aquaculture/mariculture still nascent (large potential)

• Tourism– Major potential (world’s greatest diversity: culture, flora, fauna,

geomorphology) – Increasingly important source of livelihood


RADSRADS

•Agricultural•Mineral•Forestry•Tourism•Fishing/Aquaculture•Energy (coal/gas & HEP)

Thus, Africa’s short to medium term potential lies in our natural comparative advantage:natural comparative advantage:

Namely, resource & resource-based industries (provide a competitive platform for finished products in the longer term, and

immediate market for resource inputs industries)

Raw Mat. Raw Mat. -- Int. Product Int. Product -- SemiSemi--Manufacture Manufacture -- FabricatedFabricated

capital Skills/HRD technology R&D marketing

energy logistics services etc…

FinishedHigh-ValueProducts

However, with >value-addition other factors determine competitiveness!


RADSRADS

Asian Boom:Asian Boom:New New ““scramble for resourcesscramble for resources””??

Source: IISI

Global Steel Consumption t/$1 million GDP

0

5

10

15

20

25

30

1940 1950 1960 1970 1980 1990 2000 2010

Year

Stee

l Con

sum

ptio

n t?

$1 m

illio

n G

DP

Deflated GDP to 2004 $ terms

Post WWII Minority World Growth

Failure of global growth (Minority World hegemony)

Majority World takes off

(proxy for all metals)

0

5

10

15

20

25

30

1940 1950 1960 1970 1980 1990 2000 2010

Year

Stee

l Con

sum

ptio

n t?

$1 m

illio

n G

DP





High intensity, High intensity, sellers market: sellers market:

Colonial systemColonial system

Low intensity, Low intensity, buyers market: buyers market: stagnation & stagnation &

instabilityinstability

High intensity, High intensity,

AfricaAfrica’’s new s new opportunity?opportunity?


RADSRADS

How long will boom last?However, prices will fall with increasing supply over the medium-long

term, but at a higher level (lower grades)

Steel Intensity(all metals proxy)

~$16k/capita

Data Source: BHPB 2006

PRC

China + India > 2X China + India > 2X poppop’’nn of First World!of First World!

?

India


RADSRADS

Resources Sustainability?Resources Sustainability?Resource Industry LinkagesResource Industry Linkages

1. DOWNSTREAM1. DOWNSTREAMValueValue--additionadditionBeneficiationBeneficiation

Export of resourceExport of resource--based articlesbased articles

2. SIDE2. SIDE--STREAMSTREAMInputs:Inputs:

Plant, machinery, equipment, Plant, machinery, equipment, consumables, services, consumables, services,

(export)(export)

3. TECHNOLOGICAL 3. TECHNOLOGICAL Linkages:Linkages:

““NurseryNursery”” for new tech for new tech clusters, adaptable to other clusters, adaptable to other

sectorssectors

4. INFRA4. INFRA--Linkages:Linkages:Puts in critical infra Puts in critical infra

(transport, energy) for (transport, energy) for other nonother non--mining mining

economic potentialeconomic potential

Use wasting asset Use wasting asset to underpin growth in to underpin growth in sustainable sectorssustainable sectors

DonDon’’t exploit scarce resources if you cannot make linkages: rather t exploit scarce resources if you cannot make linkages: rather extract extract slower & develop linkages concurrentlyslower & develop linkages concurrently

HRD, R&D


RADSRADS

Resources provide 2 industrial opportunities for value-addition: Beneficiation & Inputs

e.g. Mineral down- & side-stream beneficiation chain

MiningMining MineralMineral

ProcessingProcessingExplorationExploration

expl. capital goods• geophysical• drilling• survey• etc.

exploration services• GIS• analytical• data processing• financing• etc

mining capital goods• drilling• cutting• hauling• hoisting, etc.

mining services• mine planning•consumables/spares• sub-contracting• financing• analytical, etc

processing cap. goods• crushers/mills• hydromet plant• materials handling• furnaces, etc.

processing services• comminution• grinding media• chem/reagects• process control• analytical, etc

Smelting &Smelting &RefiningRefining FabricationFabrication

Refining Cap. Goods•Smelters•Furnaces•Electro winning cells•Casters

Fabrication Cap.goods•Rolling•Moulding•Machining•assembling

Refining services•Reductants•Chemicals•Assaying•Gas & elec supply

Value adding services•Design•Marketing•Distribution•Services

Resources inputs sectorResources inputs sector has a comparative advantage in has a comparative advantage in (a) relatively large local market & (b) development of (a) relatively large local market & (b) development of

tech inputs for local conditionstech inputs for local conditions(applies equally to other resource sectors)(applies equally to other resource sectors)


RADSRADS

Bauxite (Al) opportunities?

BauxiteMining

BauxiteProcessing

AluminaRefining

Chlor-AlkaliPlant

Salt/water (RO) Plant

Aluminium Smelting

Ti Cl4(“tickle”)

HMS(ilmenite/rutile)Sierra Leone?

PigmentPlant (TiO2)

Sea Water

Al rolling

Al alloying

Al casting

Mining Capital Goods & Services

plant, equipment, energy, consumables, financing,

ICT, HRD, R&D, etc.

Processing Capital Goods & Services

engineering, plant, energy, consumables, financing,

ICT, HRD, R&D, etc.

Alumina Capital Goods & Services


ICT, HRD, R&D, etc.

Aluminium Capital Goods & Services


ICT, HRD, R&D, etc.

Etc…

FABRICATION

Linkage Example:Alumina Chlor-alkali (caustic

soda) opportunity?

Caustic SodaNaOH

Al extrudingWaste:

Silica? Humic acids? Red mud- liming of acidic soils?


RADSRADS

1. In the early stages of development, there is a tendency for the growth of diversified conglomerates (in order the build the requisite corporate capital base for large projects), such as the “zaibatsu” in Japan, the “chaebol” in Korea, the “Bombay Club” in India and the diversified “Mining Houses” in South Africa and Zimbabwe;

2. Over time, these conglomerates tend to break up into specialised industry-specific companies. This increasing focus on “core competence” (resource exploitation) could deny Africa the opportunities of resource beneficiation and supplier industries;

3. This disaggregation is often accelerated by the relisting of diversified Majority World companies on to the major Minority World stock markets where, with greater international (institutional) stock holders, they come under immense pressure to “unbundle” and dispose of non-core activities, to realise stock holder value. This occurred with the southern African highly diversified “Mining Houses” (which used to have extensive resource upstream and downstream operations);

4. This evolution is generally irreversible, but a possible African strategy could be to engage “consortia” of resource, infrastructure and inputs companies to jointly develop prospective resources, in order to realise the critical linkages.

1.1. In the early stages of development, there is a tendency for the In the early stages of development, there is a tendency for the growth of growth of diversified conglomerates (in order the build the requisite corpdiversified conglomerates (in order the build the requisite corporate capital orate capital base for large projects), such as the base for large projects), such as the ““zaibatsuzaibatsu”” in Japan, the in Japan, the ““chaebolchaebol”” in in Korea, the Korea, the ““Bombay ClubBombay Club”” in India and the diversified in India and the diversified ““Mining HousesMining Houses”” in in South Africa and Zimbabwe;South Africa and Zimbabwe;

2.2. Over time, these conglomerates tend to break up into specialisedOver time, these conglomerates tend to break up into specialised industryindustry--specific companies. This increasing focus on specific companies. This increasing focus on ““core competencecore competence”” (resource (resource exploitation) could deny Africa the opportunities of resource beexploitation) could deny Africa the opportunities of resource beneficiation neficiation and supplier industries;and supplier industries;

3.3. This This disaggregationdisaggregation is often accelerated by the is often accelerated by the relistingrelisting of diversified of diversified Majority World companies on to the major Minority World stock maMajority World companies on to the major Minority World stock markets rkets where, with greater international (institutional) stock holders,where, with greater international (institutional) stock holders, they come they come under immense pressure to under immense pressure to ““unbundleunbundle”” and dispose of nonand dispose of non--core activities, core activities, to realise stock holder value. This occurred with the southern Ato realise stock holder value. This occurred with the southern African frican highly diversified highly diversified ““Mining HousesMining Houses”” (which used to have extensive resource (which used to have extensive resource upstream and downstream operations);upstream and downstream operations);

4.4. This evolution is generally irreversible, but a possible AfricanThis evolution is generally irreversible, but a possible African strategy strategy could be to engage could be to engage ““consortiaconsortia”” of resource, infrastructure and inputs of resource, infrastructure and inputs companies to jointly develop prospective resources, in order to companies to jointly develop prospective resources, in order to realise the realise the critical linkages.critical linkages.

The TNC The TNC ““core competencecore competence”” conundrum conundrum


RADSRADS

The resource curse can be avoided!“Deepening” the resource sector linkages: development of the

resource inputs & outputs industries is critical

Finland managed to shift from a 1970 resources (pc) trajectory to a 1998 manufactures (mf) trajectory, through the development of its resources inputs (machinery) and outputs (value-addition) sectors (source Palma, G. 2004)

Finland: e.g. Forestry- grew capital goods (machinery) exports and value-added

exports (wood manufactures, pulp/paper)

Finland: 1970 on primary commodities (pc- mining & forestry) inverted U-

curve, but shifts to 1998 manufacturing curve (mf- resources

inputs & outputs/beneficiation).

Chile: 1970 on manufacturing U-curve (ISI), but shifts to 1998 primary

commodities (mining & agriculture) curve, after opening up its economy

(coup) in the 70’s.


RADSRADS

Africa is wellAfrica is well--endowed with mineral resourcesendowed with mineral resources

1166%66%1127%27%PhosphatePhosphate

1145%45%774%4%AluminiumAluminium

1160+%60+%1154%54%PGMsPGMs**

1142%42%1120%20%GoldGold

1144%44%1140%40%ChromiumChromium

1182%82%2228%28%ManganeseManganese

1195%95%1151%51%VanadiumVanadium

1155+%55+%1118%18%CobaltCobalt

1188%88%1178%78%DiamondsDiamonds

Also Ti (20%), U (20%), Fe (17%), Cu (13%), etc.Also Ti (20%), U (20%), Fe (17%), Cu (13%), etc.*PGMs: Platinum Group Minerals

RankRankReservesReservesRankRankProductionProductionMineralMineral

Mineral Production & Known Resources (‘04)(however, much of Africa is still un-surveyed)


RADSRADS

SS African Mineral DepositsSS African Mineral DepositsHowever, many of the gaps correspond to zones of low geo-data

Kalahari sand cover


RADSRADS

African Geology

Areas covered with recent overburden

(unknown underlying geology)


RADSRADS

Africa also has significant Africa also has significant energy resourcesenergy resources: fossil : fossil fuels (oil, gas, coal), HEP & geothermalfuels (oil, gas, coal), HEP & geothermal

Gulf of Guinea considered to be one of the world’s

most prospective oil & gas terrains

And Africa has huge HEP (Congo R: 200GW)And Africa has huge HEP (Congo R: 200GW)

GoethermalPotential: Great

African Rift Valley


RADSRADS

e.g. INGA (DRC): 45 GW of HEP at one location e.g. INGA (DRC): 45 GW of HEP at one location (>total SA consumption)!(>total SA consumption)!

Grand Ingadam tributary


RADSRADS

e.g. INGA (DRC): 45 GW of HEP at one location e.g. INGA (DRC): 45 GW of HEP at one location (>total SA consumption)!(>total SA consumption)!

Grand Inga dam tributary


RADSRADS

Yet most Africans donYet most Africans don’’t have access to electricity and t have access to electricity and rely on biomass for energy!rely on biomass for energy!

Use minerals to develop energy potential?


RADSRADS

Although private exploration spend is increasing, this Although private exploration spend is increasing, this isnisn’’t an alternative to systematic geot an alternative to systematic geo--survey!survey!

24%

19%18%

16%

11%8% 4% Latin America

CanadaRest of World*AfricaAustraliaUSA

World exploration spending (non-ferrous), 2006(Africa 16%- but 20% of continental crust)

Pacific/SE Asia


RADSRADS

(WIR 2007)

African FDI inflowsAfrican FDI inflows

Dominated by investment in natural resources & ICT!


RADSRADS

Africa’s Undiscovered Resources

Source: USGS; Source: USGS; USGS Mineral Resources Program. The USGS Mineral Resources Program. The Global Mineral Resource Assessment ProjectGlobal Mineral Resource Assessment Project

Africa requires massive investment into basic geological Africa requires massive investment into basic geological mapping in order to assess & valorise its mineral assets. mapping in order to assess & valorise its mineral assets.

FDI for blueFDI for blue--sky exploration will only come in on an sky exploration will only come in on an unacceptably high riskunacceptably high risk--reward basis! reward basis!


RADSRADSSource: IISI

Global Steel Consumption t/$1 million GDP

0

5

10

15

20

25

30

1940 1950 1960 1970 1980 1990 2000 2010

Year

Stee

l Con

sum

ptio

n t?

$1 m

illio

n G

DP





0

5

10

15

20

25

30

1940 1950 1960 1970 1980 1990 2000 2010

Year

Stee

l Con

sum

ptio

n t?

$1 m

illio

n G

DP





High prices:High prices:colonial mineral colonial mineral

regimes: Proregimes: Pro--colonisers/colonisers/TNCsTNCs

High prices:High prices:PostPost--colonial colonial

regimes: Strongly regimes: Strongly nationalnational

High Prices: WB regimes- rents

exit (Zambia ’06: 2%!) Need to

urgently update!

High Prices: WB High Prices: WB regimesregimes-- rents rents

exit (Zambia exit (Zambia ’’06: 06: 2%!) 2%!) Need to Need to

urgently update!urgently update!

Inappropriate Mineral RegimesInappropriate Mineral RegimesAfrica is not capturing mineral rents!Africa is not capturing mineral rents!

Low prices: WB Low prices: WB revisions:revisions:

Overly proOverly pro--TNC!TNC!


RADSRADS

Extracting Greater Benefits?Conditions of Licensing

ExplorationExplorationTerrain

Exploration LicenseAutomaticity

RoR*-based tax

Mining Charter type conditions

Exploration licenceApplication

ConditionalityHigh

(low risk terrains)Low

(high risk terrains)

DelineationDelineationTerrain

Auction, based on:• Infra development• Up/downstream invest• equity (“mining charter”)• rent share• licence term

Mining Licence*ROR: Rate-of-Return


RADSRADS

Investment in Geo-knowledge • Numerous studies (USGS, W.Australia, BGS) have

definitively showed the extremely high return to the state from investment in geo-survey (~1:10 investment to return ratio to the fiscus)

• In general, the lower the geo-info base, the higher the risk, the lower the share of resource rents to the state: The less a state knows about the value of its mineral assets, the worse the deal it’s likely to be able to negotiate with foreign investors.

• This will inevitably compromise the longer term sustainability of the investment: An unequal extractive deal serves neither the investor nor the host state over the longer term!

•• Investment into African infrastructure should not Investment into African infrastructure should not only target physical infrastructure but also only target physical infrastructure but also knowledge infrastructureknowledge infrastructure (geo(geo--survey)survey)


RADSRADS

•• The bulk of The bulk of JRCsJRCs (Junior Resource Companies) operating in (Junior Resource Companies) operating in Africa are from Europe and its settler colonies (Canada, US, Oz)Africa are from Europe and its settler colonies (Canada, US, Oz)which poses problems of political sustainability;which poses problems of political sustainability;

•• Need to facilitate the growth of indigenous exploration Need to facilitate the growth of indigenous exploration companies (companies (JRCsJRCs) to build local buy) to build local buy--in & legitimacy;in & legitimacy;

•• Possible PRCPossible PRC--African JRC exploration partnerships?African JRC exploration partnerships?•• SoquemSoquem (mineral DFI) in Canada successfully facilitated the (mineral DFI) in Canada successfully facilitated the

growth of Frenchgrowth of French--speaking speaking JRCsJRCs in Quebec from 1965, by in Quebec from 1965, by identifying potential targets and taking up to 49% of the identifying potential targets and taking up to 49% of the risk/equityrisk/equity-- AfDB could establish an African AfDB could establish an African SoquemSoquem to share to share risk and nurture local participation in mineral development? risk and nurture local participation in mineral development?

•• Possible first sight (3 months?) on all new geoPossible first sight (3 months?) on all new geo--survey data?survey data?•• National National DFIsDFIs should also target indigenous investment into the should also target indigenous investment into the

mining inputs (supplier) sector;mining inputs (supplier) sector;

Growing African Growing African JRCsJRCs

Predominantly foreign mineral DFI is ultimately Predominantly foreign mineral DFI is ultimately politically unsustainable!politically unsustainable!


RADSRADS

Africa also has significantAfrica also has significantAgriAgri--potentialpotential


RADSRADSSource: FAO(100%) (6%) (9%) (85%) 3.8100 0149 9209 02013 000127 900Total

(100%)(9%)(16%)(75%)6.912.618 9001 8003 00014 100Southern

(100%)(3%)(14%)(83%)2.54.36 5002009005 400Eastern

(100%)(14%)(43%)(43%)0.10.91 400200600600Central

(100%)(12%)(26%)(62%)0.64.16 1007001 6003 800Gulf of Guinea

(100%)(1%)(5%)(94%)14.216.124 1003001 20022 600Sudano-Sahelian

(100 %)18%)(7%)(85%)152.650.976 3005 8005 50065 000Northern

%%x 10 6 m³/yrx 10 6 m³/yrx 10 6 m³/yrx 10 6 m³/yr

% of internal resources

As % of total

TotalIndustriesCommunitiesAgricultureRegion

Withdrawals by sector

And water potentialAnd water potential……(except for North Africa)(except for North Africa)


RADSRADS

Major River BasinsMajor River BasinsMajor River Basins


RADSRADS

Less than 50% in the well-watered tropics!

Land utilisation in Africa(percentage of total land area)

Source: UNEP- compiled from FAOSTAT 2001


RADSRADS

Average annual nutrient depletion (NPK) 1993-95

Fertilizer application rates (1997)

Source: FAOSTAT 1999.

Compiled by Stan Wood, IFPRI

kg NPK per hectare

0 10 20 50 100

no data

But, nutrients are being rapidly depletedBut, nutrients are being rapidly depleted……


RADSRADS

Due to the lowest fertiliser Due to the lowest fertiliser use in the world!use in the world!

Africa


RADSRADS

Agri-mineral deposits (ex-gas/coal & K)

Yet Africa has abundant known fertiliser minerals!

Nitrogen sources (oil/gas & coal) &

K resources

But, generally undeveloped for the African market, mainly due to severe logistics constraints.


RADSRADS

Africa also has large Africa also has large biofuelsbiofuelsproduction potential.production potential.


RADSRADS

But, desertification is spreading…

Global warming, >climate Global warming, >climate variability & overvariability & over--usage pose usage pose frightening threats to African frightening threats to African

agriculture: agriculture: Alternative Alternative livelihoods are needed!livelihoods are needed!


RADSRADS

•Africa is the highest continent (few navigable rivers), > infra cost and O&M cost;•93% of Africa in the tropics (ITCZ, high ppt): >cost of infrastructure provision and O&M;•Incoherent European balkanisation resulted in many African states being landlocked;•Africa has only 10% of land within 100km of coast (cf. 18% OECD & 27% Latin America) and•Only 21% of its people live within 100km of coast (cf. 69% OECD & 42% Latin America);

Resulting in Africa having the world’s highest relative logistics costs (poor infrastructure)

Africa’s potential could be realised through integrated Development Corridors (not a neo-

colonial “scramble for resources”)

•Africa is the highest continent (few navigable rivers), > infra cost and O&M cost;•93% of Africa in the tropics (ITCZ, high ppt): >cost of infrastructure provision and O&M;•Incoherent European balkanisation resulted in many African states being landlocked;•Africa has only 10% of land within 100km of coast (cf. 18% OECD & 27% Latin America) and•Only 21% of its people live within 100km of coast (cf. 69% OECD & 42% Latin America);

Resulting in Africa having the world’s highest relative logistics costs (poor infrastructure)

Africa’s potential could be realised through integrated Development Corridors (not a neo-

colonial “scramble for resources”)

But this huge commodities potential is critically constrained by poor infrastructure

But this huge commodities potential is But this huge commodities potential is critically constrained by poor infrastructurecritically constrained by poor infrastructure


RADSRADS

Insurance and freight import values for Insurance and freight import values for selected groups of countriesselected groups of countries

Source: UNCTAD12.514.613.8Least developed countries

..24.630.230West Africa

..9.911.512.5Southern Africa 14.616.720.217.9East Africa ..10.715.814.8Landlocked Africa:6.57.411.27.7Asia5.66.412.86.7America101011.311.310.610.611.311.3AfricaAfrica6.57.411.27.7Developing countries total: of which:3.43.54.23.8Developed market economy countries4.14.14.44.45.55.54.64.6World totalWorld total1997199519901985Freight & insurance as a % of costFreight & insurance as a % of cost

AfricaAfrica’’s logistics costs ~250% global average!s logistics costs ~250% global average!


RADSRADS

Resource-based African Development Strategy:4 sub-strategies

Mining,Agric,

Forestry

ResourceProcessing Refining

Inter-mediate products

Fabri-cation

Resource Capital Goods & Resource Capital Goods & Services (generic tech)Services (generic tech)

Lateral Migration into Lateral Migration into Unrelated knowledgeUnrelated knowledge--based Industriesbased Industries

egeg: process control: process controlconstruction equipment,construction equipment,atmospheric control,atmospheric control,pumping, materials pumping, materials handling, etc, etchandling, etc, etc……..

Enhance resource-tech (HRD, R&D) capacity


RADSRADS

Enhance resource-tech (HRD, R&D) capacity

Mining,Agric,

Forestry

ResourceProcessing Refining

Inter-mediate products

Fabri-cation

Resource Capital Goods & Resource Capital Goods & Services (generic tech)Services (generic tech)

Lateral Migration into Lateral Migration into Unrelated Unrelated HitechHitechIndustriesIndustries

egeg: process control: process controlconstruction equipment,construction equipment,atmospheric control,atmospheric control,pumping, materials pumping, materials handling, etc, etchandling, etc, etc……..

Strategy 1: Beneficiation (RBI)Strategy 1: Beneficiation (RBI)

Strategy 2: Resource InputsStrategy 2: Resource Inputs

Strategy 3: Lateral MigrationStrategy 3: Lateral Migration

Resource-based African Development Strategy:4 sub-strategies

ResourceResource--based African Development Strategy:based African Development Strategy:4 sub-strategies


RADSRADS

Maghreb Coastal

Red Sea - Nile

Djibouti

Mombasa

Madagascar Bas Congo

Libreville Lomie

Niger: Dakar –Port Harcourt

ConakryBuchanan

Gulf of GuineaCoastal

SekondiOugadougou

Douala

Current SDIsRSDIP

NEPAD SDP: 1st Pass

Strategy 4:Strategy 4:ResourceResource--Based Development Corridors Based Development Corridors

(Nepad (Nepad SDPsSDPs))

Strategy 1: Resource Beneficiation (RBI)Strategy 1: Resource Beneficiation (RBI)Strategy 2: Resource Inputs IndustriesStrategy 2: Resource Inputs IndustriesStrategy 3: Lateral Migration of Knowledge Strategy 3: Lateral Migration of Knowledge

intensive (inputs) Industriesintensive (inputs) IndustriesStrategy 4: Integration: ResourceStrategy 4: Integration: Resource--Based Based

Development Corridors (Nepad Development Corridors (Nepad SDPsSDPs))


RADSRADS

NEPADNEPADSpatial Development Spatial Development

ProgrammeProgramme(SDP)(SDP)


RADSRADS

Sharing of Best in Practices in Southern Africa SDIs/Dev.Corridors (RSDIP)

Based on Based on UNREALISED UNREALISED economic potentialeconomic potential


RADSRADS

BASIC DC METHODOLOGY: KEY ASPECTSBASIC DC METHODOLOGY: KEY ASPECTS

• Inherent economic potential: Natural resources (agri & mineral);

• Configuration of investments to ensure infrastructure viability through sustainable revenue streams;

• Crowding-in of private sector investment;• Promotes PPPs where feasible;• Secure political commitment (HoS) and provide the

requisite conducive environment;• Ensure rapid planning and delivery projects and

programmes (momentum).• Ensure densification: open-access, linkages and

value-addition


RADSRADS

infrastructure needs

revenue streams

SDP methodology:SDP methodology:SynchronousSynchronous

INVESTMENT CONFIGURATIONINVESTMENT CONFIGURATION

IDIDViable Viable

resource resource investment investment projectsprojects

DimensionDimensionrequisite requisite

infrastructinfrastruct--ureure

Addresses 4market failures:1)Infra econ-of-scale2)Sync users (time)3)Political borders4)Information/data


RADSRADS

• Addresses the urgent need for effective investment investment & capacity prioritisation& capacity prioritisation based on sound economic rationale;

• Links and synchronises private sectorprivate sector economic investment project opportunities with key infrastructure projectsinfrastructure projects;

• Promotes the realisation of wider developmentwider developmentpotential (densification) catalysed by infrastructure provision and anchor investments;

• Provides spatial focus for strategies to promote regional economic integrationregional economic integration & development.

•• However, it is onlyHowever, it is only oneone component of an integrated component of an integrated growth & development strategy!growth & development strategy! (focus on (focus on ““lowlow--hanginghanging--fruitfruit”” to catalyse development)to catalyse development)

THE DC APPROACH: What value does it add?


RADSRADS

Due to the global market distortion of First World Due to the global market distortion of First World agriagri--subsidies (Doha), mineralsubsidies (Doha), mineral--based based opportunities are generally the only ones with opportunities are generally the only ones with requisite rentsrequisite rents to pay for the provision of costly to pay for the provision of costly infrastructure (transport & energy).infrastructure (transport & energy).For this reason the indicative For this reason the indicative DCsDCs (SDP) (SDP) ““anchoranchor””projects tend to be projects tend to be minerals/energyminerals/energy based which based which establish infrastructure to underpin the viability of establish infrastructure to underpin the viability of projects in other, sustainable, sectors: projects in other, sustainable, sectors: ““densificationdensification””).).

Underlying DC DriversUnderlying DC Drivers

However, the DC methodology goes beyond the However, the DC methodology goes beyond the ““colonialcolonial”” paradigm (resources to coast) to paradigm (resources to coast) to integrated growth & developmentintegrated growth & development using resources using resources to catalyze the processto catalyze the process


RADSRADS

Development of local & regional (RECs) capacity: Financial, Governance & Regulatory, HRD/Skills, R&D, SMME

support, ongoing DC capacity

•Strengthening the investmentregime and institutions. •Feeder Infrastructure

(to facilitate densification)

DC Time-Line1) ID Requisite “trunk” Infrastructure:Transport: road/rail/ports/pipelinesEnergy: electricity/gas/oil/biomassWater; other (telecoms), to realise

the investment potential.2) Dimension resource (& resource-

based) and other investment Projects & linkages (up- & downstream)

opportunities

Identification and facilitation of appropriate investors and

financiers (DFIs et al) to realise the investment targets

Conceptualisation:Sectoral scans of Investment potential: Minerals, Energy,

Agriculture, Forestry, Tourism, etc.

Assessment of infrastructureneeds

Deepening of the resource sector:Up-, down- & side-stream linkages

Resources R&D, & tech development.Sustainable resource-based G&D


RADSRADSAnchor & “cluster”

Stranded investment

Stranded investment

Anchor & “cluster”

Agri-node & “cluster”

feede

r

“TRUNK” Infrastructure: PPP

Idealised DC ConfigurationIdealised DC Configuration

Problem feeder

Problem feeder

“DENSIFICATIONDENSIFICATION””Feeders often need Feeders often need to be funded thruto be funded thru’’

fiscus/grantfiscus/grant

DC logistics “catchment”


RADSRADS

APPLICATION OF APPLICATION OF THE SDI METHODOLOGY:THE SDI METHODOLOGY:

SOME EXAMPLESSOME EXAMPLES


RADSRADS

MAPUTOMAPUTO

Mature SDP Example: Mature SDP Example: The Maputo Development CorridorThe Maputo Development Corridor

Pande-Secunda Gas line. PPP Sasol completed

Coal-based Power Station2 transmission lines to Matola

completed

Liquid Fuels & Petro-chemicals: Sasol

Al smelter 500ktpaBHPB completed

Joburg-Maputo HighwayPPP- BOT completed

Port of Matola/MaputoUpgrades, PPP

Joburg to Maputo Railway line: Upgrade

GA

UTE

NG

GA

UTE

NG


RADSRADS

MAPUTOMAPUTO

Mature SDP Example: Mature SDP Example: The Maputo Development CorridorThe Maputo Development Corridor

Pande-Secunda Gas line. PPP Sasol completed

Coal-based Power Station2 transmission lines to Matola

completed

Liquid Fuels & Petro-chemicals: Sasol

Al smelter 500ktpaBHPB completed

Joburg-Maputo HighwayPPP- BOT completed

Port of Matola/MaputoUpgrades, PPP

Joburg to Maputo Railway line: Upgrade

GA

UTE

NG

GA

UTE

NG

New MDC Potential Projects:New MDC Potential Projects:•• Greater Limpopo TransGreater Limpopo Trans--frontier Park (underway)frontier Park (underway)

MozalMozal III (Al: $1bn) III (Al: $1bn) •• Corridor Sands (Ti & Fe: >$0.3bn) Corridor Sands (Ti & Fe: >$0.3bn) •• MMC: Maputo Metallurgical Complex (Fe & Steel: MMC: Maputo Metallurgical Complex (Fe & Steel:

>$1bn)>$1bn)•• MMC (Ti & Fe: $0.3mn)MMC (Ti & Fe: $0.3mn)•• Fertiliser complex (Fertiliser complex (PhosPhos & Nitrogen)& Nitrogen)•• ChlorChlor--alkali complex (alkali complex (ClCl, TiO, TiO22, , NaOHNaOH))•• Numerous megaNumerous mega--project inputs industries project inputs industries •• Tourism Investments (Cluster: >$0.3bn)Tourism Investments (Cluster: >$0.3bn)

Major investments to date: Major investments to date: >$5bn>$5bn


RADSRADS

High Cu Magnetitedumps > 300 MT

Magnetite (>Cu)dump upgrading

plant

(Ti/V) MagnetiteSep. & conc. plant• magnetite• ilmenite

Rail

Slurry pipeline

Pande Gas Pipeline

Gas Connector

RailwayMajor RoadDuvhaPower LinesPande GasPipeline

MDC phase II: MDC phase II: Maputo Metallurgical ComplexMaputo Metallurgical Complex

Other Potential:Ilmenite smelter Ti/Fe

Fertiliser plant N/PChlor-alkali plant Na/Cl

Fe pelletising plant

MMC:MMC:Iron (DRI) &Iron (DRI) &Steel PlantSteel Plant

Fe exports

Elec transmission

Possible Ti/Fe From Chibuto


RADSRADS

Under implementationUnder implementation--The Zambezi Valley DevelopmentThe Zambezi Valley Development

Mt Mulanje bauxite

CaboraBassaHEP

MpandeUncuaHEP

Sena Sugar

Mt Muambe Fe

Moatize coking and steam coal (CVRD):

Sena Rail Rehab

Beira Port Rehab

Moatize Thermal Power Station

Elec trans-mission

Potential Al Smelter

Possible BOF Muambe Fe ore &

coking coal

Alternative bulk (coal) rail

route

Rehab of peasant

cotton (ex-prazos)


RADSRADS

Schematic Development Corridor Approach

DEDE--BOTTLENECKING PROJECTSBOTTLENECKING PROJECTS

KEY ANCHOR PROJECTSKEY ANCHOR PROJECTS

CLUSTER INITIATIVESCLUSTER INITIATIVESCLUSTER INITIATIVES

Debots

Industrial

NumerousNumerousinvestmentsinvestments

Hitch-hike existing investments

New anchor infra PPP’s

Other infra

PPP’s, BOT, ROTAlready underway

ID DebotsProject scoping & dimensioning

Cluster inv. projectsID 3-4 ind. clustersCluster orgs

Debots = debottlenecking projects (infrastructure)

Conceptual Workshops CONCEPTUALISATIONCONCEPTUALISATIONApp doc & Conf prep DC invest prom agency

Investor “fiesta”

Appraisal(scan)


RADSRADS

SDP DESKSDP DESK--TOP ANALYSIS:TOP ANALYSIS:

““An indicative assessment to An indicative assessment to determine the prospects for a determine the prospects for a NEPAD Spatial Development NEPAD Spatial Development

ProgrammeProgramme””

On Nepad websiteOn Nepad website

WWW.NEPAD.ORGWWW.NEPAD.ORG(Mr Godwin Punungwe)


RADSRADS

NEPAD SD PROGRAMMEPortfolio of Possible SDPs

12

11

10

9

8

7

6

5

4

3

2

1

No.

MadagascarMadagascarSouthern Africa

Djibouti, Ethiopia, (Kenya)Djibouti

Kenya, Uganda, DRC, SudanMombasaEast Africa

DRC, Republic of Congo, AngolaBas-Congo

Gabon, Republic of Congo, CameroonLibreville-Lomie

Cameroon, ChadDouala-N’djamenaCentral Africa

Nigeria, Benin, Togo, Ghana, Cote D’Ivoire, LiberiaGulf of Guinea

Ghana, Burkina FasoSekondi/Takoradi-Ouagadougou

Guinea, Liberia, Cote D’ivoireConakry-Buchanan

Senegal, Gambia, Mali, Niger, NigeriaNiger (Dakar-Port Harcourt)

West Africa

Egypt, SudanRed Sea-Nile

Morroco, Algeria, Tunisia, Libya, EgyptMaghreb CoastalNorth Africa

CountriesSDPRegion


RADSRADS

Corridor

Solid Mineral Potential

Agricultural Potential Projects Logistics Power

Clustering Potential

Regional Integration

Data Availability Score

Bas Congo SDI (current) 30 5 20 15 20 30 20 10 150

Maghreb Coastal 15 5 15 15 20 30 30 10 140

Niger (Dakar - Pt Harcourt) 15 15 23 15 13 20 30 5 136

Conakry-Buchanan 30 10 23 13 13 10 20 5 124

Gulf of Guinea- coastal 0 5 25 15 18 20 30 5 118

Mombasa 15 10 20 8 13 10 30 5 111

Madagascar 30 10 23 13 15 10 0 10 111

Libreville-Lome 15 5 18 15 13 20 10 5 101

Douala- N'djamena 30 5 18 8 13 10 10 5 99

Red Sea-Nile 0 5 5 15 13 10 10 10 68

Djibouti 0 10 3 15 8 0 20 5 61

Sekondi-Takoradi 0 10 3 15 13 0 0 10 51

SELECTION CRITERIA & RANKING

But selection but more likely be throughbuy-in by DC footprint states!


RADSRADS

Maghreb Coastal

Red Sea - Nile

Djibouti

Mombasa

Madagascar Bas Congo

Libreville Lomie

Niger: Dakar –Port Harcourt

ConakryBuchanan

Gulf of GuineaCoastal

SekondiOugadougou

Douala

NEPAD indicative Spatial Development Program First

Pass!

Current SDIsRSDIP

NEPAD SDP: 1st Pass


RADSRADS

Niger SDP:Niger SDP:Countries: Senegal/Gambia, Mali, Niger, NigeriaCountries: Senegal/Gambia, Mali, Niger, Nigeria

Anchors: Resource: Fe (Anchors: Resource: Fe (FalemeFaleme) & iron/steel, Au () & iron/steel, Au (LoulouLoulou), ), U (Niger), Oil/gas (Delta), GTL (U (Niger), Oil/gas (Delta), GTL (EscravosEscravos), Al (), Al (AlsconAlscon), Ti ), Ti (Dakar), (Dakar), PhosPhos ((TiabaTiaba), agriculture (cotton), etc.), agriculture (cotton), etc.

Infra: Infra: riverineriverine transport , rail to Dakar (??), Ore terminal transport , rail to Dakar (??), Ore terminal (~Dakar), power ((~Dakar), power (elecelec grid), roads upgradegrid), roads upgrade


RADSRADS

ConakryConakry--BuchananBuchananCountries: GuineaCountries: Guinea--Liberia (Cote dLiberia (Cote d’’Ivoire)Ivoire)Anchors: Fe (Anchors: Fe (NimbaNimba) & iron/steel (gas line?), Al (Conakry, ) & iron/steel (gas line?), Al (Conakry, FriguiaFriguia), Au (), Au (SiguiriSiguiri), Ni (Man) & ), Ni (Man) & FeNiFeNi (gas?), agriculture(gas?), agricultureInfra: gas line, rail (ore), Infra: gas line, rail (ore), elecelec grid, port upgradegrid, port upgrade


RADSRADS

Gulf of Guinea Coastal SDPGulf of Guinea Coastal SDPCountries: Nigeria, Benin, Togo, Ghana, Cote dCountries: Nigeria, Benin, Togo, Ghana, Cote d’’Ivoire, Ivoire, LiberiaLiberiaAnchors: Oil/gas (Delta & pipeline), GTL, Al (Delta), Anchors: Oil/gas (Delta & pipeline), GTL, Al (Delta), Iron/steel (Iron/steel (Sekondi/TakoradiSekondi/Takoradi, Buchanan), Mn (, Buchanan), Mn (NsutaNsuta) & ) & FeMnFeMn ((SekondiSekondi-- gas?); tourism (coast, heritage), gen. gas?); tourism (coast, heritage), gen. industry (gas), agriculture (palm oil/carbon), fishing & industry (gas), agriculture (palm oil/carbon), fishing & mariculturemaricultureInfra: gas line,, Infra: gas line,, elecelec grid, ports, grid, ports, cabotagecabotage, coastal highway, coastal highway


RADSRADS

EastEast--West West SDPsSDPs: Critical for African integration!: Critical for African integration!

GMRA High min potential

?

USGSGMRA

High Mineral Potential

Zones

WB Trade Study

(Buys et al)


RADSRADS

ResourceResource--based Development?based Development?Overcoming the Overcoming the

Resources Curse:Resources Curse:Resources GovernanceResources Governance


RADSRADS

The “Resources Curse”Improving Governance in the Natural Resource

SectorNew developments

The The ““Resources CurseResources Curse””Improving Governance in the Natural Resource Improving Governance in the Natural Resource

SectorSectorNew developmentsNew developments

• African Peer Review Mechanism (APRM) • EITI- Extractive Industries Transparency

Initiative• Equator Banks Principles• Governance of “Conflict Minerals”• SHE standards/monitoring• Windfall Rent Management• Regional authorities: power pools; river

catchment bodies, DCs, customs/currency unions, etc.


RADSRADS

APRMAPRM• The African Peer Review Mechanism (APRM) is a mutually

agreed instrument voluntarily acceded to by the member states of the African Union (AU) as a self-monitoring mechanism.

• The mandate of the APRM is to encourage conformity in regard to political, economic and corporate governance values, codes and standards, among African countries and the objectives in socio-economic development within Nepad.

• 25 countries have acceded (APRM MOU):– Algeria, Angola, Cameroon, Republic of Congo, Egypt, Ethiopia,

Gabon, Benin, Burkina Faso, Mali, Mauritius, Senegal, Tanzania, Lesotho, Sierra Leone, Malawi, Ghana, Kenya, Mozambique, Nigeria, Rwanda, South Africa, Sudan, Uganda and Zambia.

• The APRM is not meant to exclude or punish countries. There is no conditionality attached to the mechanism.

• Integrate EITI principles (below) into APRM?


RADSRADS

• EITI creates transparency over the flow of money from oil, gas and mining companies to the governments of the countries in which they operate (Launched at WSSD Joburg in 2002)• The objective is to increase accountability over the use of natural resource wealth to ensure it is a blessing and not a curse.• Country led: Brings together governments, companies, NGOs, investors, international institutions• > 25 countries implementing• However, perceived as “rehab” facility- Needs support from low-risk extractive states like SA, Botswana, Oz, Norway, Canada, etc.• Needs to also cover upstream (contracts/licenses)• COST- construction/infra “EITI” launched ’07 (UK)

•• EITI creates transparency over the EITI creates transparency over the flow of moneyflow of money from from oil, gas and mining companies to the governments of the oil, gas and mining companies to the governments of the countries in which they operate (Launched at WSSD countries in which they operate (Launched at WSSD Joburg in 2002)Joburg in 2002)•• The objective is to increase accountability over the use of The objective is to increase accountability over the use of natural resource wealth to ensure it is a blessing and not a natural resource wealth to ensure it is a blessing and not a curse.curse.•• Country led: Brings together governments, companies, Country led: Brings together governments, companies, NGOs, investors, international institutionsNGOs, investors, international institutions•• > 25 countries implementing> 25 countries implementing•• However, perceived as However, perceived as ““rehabrehab”” facilityfacility-- Needs support Needs support from lowfrom low--risk extractive states like SA, Botswana, Oz, risk extractive states like SA, Botswana, Oz, Norway, Canada, etc.Norway, Canada, etc.•• Needs to also cover upstream (contracts/licenses)Needs to also cover upstream (contracts/licenses)•• COSTCOST-- construction/infra construction/infra ““EITIEITI”” launched launched ’’07 (UK)07 (UK)


RADSRADS

• The "Equator Principles“: A financial industry benchmark for determining, assessing and managing social & environmental risk in project financing

• The Equator Principles Financial Institutions (EPFIs) have adopted the Principles in order to ensure that the projects they finance are developed in a manner that is socially responsible and reflect sound environmental management practices.

• Over 50 Banks have joined (mainly 1st World).• These Principles are intended to serve as a common baseline and

framework for the implementation by each EPFI of its own internal social and environmental policies

•• Disadvantages: Mainly 1Disadvantages: Mainly 1stst World driven (WB/IFC & NGOs) and 1World driven (WB/IFC & NGOs) and 1ststWorld concerns (donWorld concerns (don’’t look at the developmental impact)t look at the developmental impact)


RADSRADS

–– Minerals used to finance civil wars & crime need Minerals used to finance civil wars & crime need governance systems, particularly precious & governance systems, particularly precious & semisemi--precious minerals targeting the precious minerals targeting the ““fashionfashion””market.market.

–– Diamonds:Diamonds:•• The Kimberley Process Certification Scheme (KPCS) The Kimberley Process Certification Scheme (KPCS)

is a PPP process designed to certify the origin of is a PPP process designed to certify the origin of diamonds from sources which are free of conflict. The diamonds from sources which are free of conflict. The certification scheme aims at preventing "certification scheme aims at preventing "conflict conflict diamondsdiamonds" (also known as "blood diamonds") from " (also known as "blood diamonds") from entering the mainstream rough entering the mainstream rough diamonddiamond market.market.

–– Other Minerals: Other Minerals: Regulate gold (fashion Regulate gold (fashion market), market), coltancoltan, etc. in a similar way?, etc. in a similar way?

Governance of Governance of ““Conflict MineralsConflict Minerals””


RADSRADS

SHE: Safety, Health & EnvironmentSHE: Safety, Health & Environment• Need a continuous method of independent SHE

monitoring of all extractive plants (as per EITI system);• Need commonly accepted African SHE standards, to be

objectively monitored on a regular basis (e.g. Cyanide Code). Such standards need to be reconciled with international (e.g. ISO) standards;

• Need to ensure that the post-mining rehab costs are amortised through annual transfers during life of mine and periodically reassessed (5 yearly?): Any surpluses to accrue to central fund for rehab of “ownerless” mine sites.

• Kyoto: CDM useful, but needs to be based on carbon footprint (consumption) and to valorise conservation(forests) as well as forestation.


RADSRADS

Managing Windfall RentsManaging Windfall Rents• Windfall mineral rents need to be equitably

appropriated (rate of return tax regime, as per oil & gas sector).

• However, large forex inflows could distort the economy (Dutch Disease). Need a method of inflows management:

• “Stabilisation” or “Future” Funds for investment in long-term African infrastructure (c.f. Pan-African Infra Fund: PAIDF)?


RADSRADS

e.g. Norwegian Global Fund• Oil & gas taxes are invested in a global portfolio and earnings are used by government for current expenditure.

Source: Fridjof Barents, UNCTAD 2006

For African countries, the windfall earnings could be For African countries, the windfall earnings could be invested in an offshore African investment fund (PAIDF?) & invested in an offshore African investment fund (PAIDF?) &

committed to longcommitted to long--term infrastructure investment, to term infrastructure investment, to ameliorate currency appreciation (Dutch Disease) & ameliorate currency appreciation (Dutch Disease) &

improve national competitiveness.improve national competitiveness.


RADSRADS

Local govt:Community

development

MineralsInputs:

(supplier industries)

Geo-dataexpl. licenses

(GSD)

Mineral-beneficiation Mineral

Taxation:Future Funds

LabourRegulation,

Health & Safety

Enviro:SEA, EIAs

Trust Funds

MineralHRD,R&D

Infra:Transport

Poweretc

MineralRegulation

Licences

MineralMineralProjectProject

National Capacity for Minerals Governance

Each requires capacitation/support! Tall order? But achievable collectively


RADSRADS

Min of Labour

Min of Finance

Min of Enviro

Min of Industry

Mins of Infra-

structure

Min of Mines

MineralMineralProjectProject

National:Govt, MPs, pvt. sector, civil soc.

DC HoS Bilateral:X-border infragovernance?

REC Institutions: power pools, water bodies, FTA, CU,

CMA, chambers, etc

African:AU/ARPM, NEPAD,

AfDB, UNECA, PAIDF, geo-data

etc

International:UN, WTO, WB,

EITI, ICMM, Kimberly, Kyoto,

Equator, SHE, etc.

Multi-layered Minerals Governance?


RADSRADS

ProcessingProcessing IntermediatesIntermediates(feedstocks)(feedstocks)ResourcesResources

ExploitationExploitation

Exploitationcapital goods:e.g. plant, equipment,

after-market, etc.

.

Exploitation Consumables

& services:e.g. financial, technical, consumables, logistics,

energy, skills, etc.

Processingcapital goods

Processing Consumables

& services

Intermediatescapital goods

IntermediatesConsumables

& services

Infrastructure: transport, energy, skills (SDP)

Catalyse other Sectors & areas (agri, tourism, etc.)

Feedstocks & Tech. (bene.)

Manufacturing (e.g. cap goods)

Resource-inputs key to diversification (e.g. Nordics)

BEYOND COMMODITIES?BEYOND COMMODITIES?Use Asian resource demand to kick-start an

African Resource-based Development Strategy“RADS”

RADS Recap:RADS Recap:


RADSRADS

Resource ExploitationResource Beneficiation

Resource InfrastructureDensification Infrastructure

Unskilled resource labour

Rents from Resource diversification industriesand catalysed industriesResource rents

Schematic RADS Phasing (relative economic importance)

Resource Inputs production & Lateral migration(diversification)

Skill intensity (HRD)

Import of Resource Inputs

Resource Exploitation & infrastructure phase

Resource Consumables & HRD phase

Resource R&D, capital goods & services phase

Lateral migration & diversification phase

Phase 1 Phase 2 Phase 3 Phase 4

Resource R&D. high level skills and tech development

Import of Resource Tecnologies

Complex regulation, M&E, arbitration, governance

Contract/license resource & infra (PPP) governance

I

II

III

IV

V

VI

VII


RADSRADS

Way Forward?Way Forward?•• Use resource boom to leverage high rent resources (e.g. Use resource boom to leverage high rent resources (e.g. minerals) to establish infrastructure for higher impact agricultminerals) to establish infrastructure for higher impact agriculture, ure, tourism, manufacturing, etc.;tourism, manufacturing, etc.;••Invest in African resourceInvest in African resource--knowledge infrastructure (e.g. knowledge infrastructure (e.g. geosurvey) & facilitate the development African resources geosurvey) & facilitate the development African resources companies (AfDB: JRC DFI?);companies (AfDB: JRC DFI?);•• Ensure equitable state share of resource and windfall rents andEnsure equitable state share of resource and windfall rents andmanagement (UNECA ISG project, WB projects, AfDB legal management (UNECA ISG project, WB projects, AfDB legal facility);facility);•• Establish DC capability: NEPAD, AfDB/WB, REC? Establish DC capability: NEPAD, AfDB/WB, REC? •• Finalise AfDB, WB, REC?, ADCP DC pilot partnership;Finalise AfDB, WB, REC?, ADCP DC pilot partnership;•• Launch 1 or 2 pilot, high impact, Launch 1 or 2 pilot, high impact, DCsDCs as learning programmes as learning programmes (RECs?, AfDB, NEPAD, ADCP);(RECs?, AfDB, NEPAD, ADCP);••Link requisite infrastructure financing to user (resources) Link requisite infrastructure financing to user (resources) investment (investment (““use or payuse or pay””))-- PPPsPPPs;;••Ensure Ensure ““densificationdensification”” (donor agencies(donor agencies-- ADCP?) and realisation ADCP?) and realisation of collateral opportunities to avoid enclave development;of collateral opportunities to avoid enclave development;


RADSRADS

Way Forward (governance)?Way Forward (governance)?•• Use concrete DC projects to develop Use concrete DC projects to develop ““bottombottom--upup”” xx--border border trade & regulatory harmonisation (easier if already in placetrade & regulatory harmonisation (easier if already in place--RECs);RECs);•• Use Use DCsDCs to build Xto build X--borderborder governance &governance & institutional institutional capacity (REC?)capacity (REC?) for areas with high economic potential for areas with high economic potential (power pools, water catchment authorities, transport (power pools, water catchment authorities, transport authorities, etc.): AfDB/WB et al support;authorities, etc.): AfDB/WB et al support;•• Support from WB/AfDB on negotiating large DC Support from WB/AfDB on negotiating large DC investments & building ongoing (REC/state?) negotiating, investments & building ongoing (REC/state?) negotiating, monitoring, auditing, regulating capacity;monitoring, auditing, regulating capacity;•• Deepen and widen continental and international resource Deepen and widen continental and international resource exploitation protocols (Equator Banking Principles, APRM, exploitation protocols (Equator Banking Principles, APRM, SHE, EITI, COST, Kimberley Process, AfricaSHE, EITI, COST, Kimberley Process, Africa--PRC PRC ““CompactCompact””?, etc.)?, etc.)


RADSRADS

e.g. an Africa-PRC ““CompactCompact””for Growth & Development?

• Configure a mutual benefit “compact” of intent between the AU/AfDB and PRC that “balances”access to resources and markets with:– Infrastructure not only for resource extraction, but also for

integrated development (Nepad SDP concept)– HRD in all the FDI areas– Resource beneficiation before export– Resource inputs (supplier) industries– JVs to develop local capital– Investment in geo-survey (joint “Afro-Sino” JRC DFI?)– Location of consumer products industries for products

destined for African markets (where viable) – (AGOA, EPAs, MGOA?)

– Adherence to codes of conduct (EITI, Equator Banks, SHE codes)

• Establish a joint Africa-PRC investment facilitation & monitoring commission?

ACHIEVABLE??


RADSRADS

Source: MINTEK - CDC Presentation

Some SS African Opportunities(Fe ore, coal/gas deposits)

Matola: PhalaFe, Pande gas

Gauteng: BC Fe, coal fines

S.Bay: Kathu Fe; Offshore gas?

Coega: Kathu Fe, Molteno coal?

Luanda: Kissala Fe, Soyo gas

Tete: Muande Fe; Moatize coke

Liganga: Liganga Fe; Ruhuhu coal

Kodo: Kodo Fe; S.Sudan gas

Buchanan: Nimba Fe, delta gas Ajaokuta:

Itakpe Fe, delta gas

e.g. Iron/Steele.g. Iron/Steel

R.Bay: P.Retief Fe KZN coal/gas

Resource Scarcity:Link resource access to:

local processing, infra estab/rehab, inputs

industries, HRD, etc.Dakar:

Faleme Fe, Diam gas

Nouakchott: Tiris Fe,

Chinguetti gas

gas line


RADSRADS

Thanks to:Thanks to:• AfDB• AU Commission• NEPAD• UNECA• RECs• RSDIP & Mintek


RADSRADS

[email protected]


RADSRADS

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