“Investment will flow because there is a lot of money in the market.”
The African mining processing industry can be developed through a concerted and combined effort by the sector and government. This was the consensus during a discussion as part of the Africa Mining Forum Digital Event entitled: “Made in Africa: Building a solid beneficiation industry to deliver better return on investment.”
“Beneficiation is achievable but it takes a lot of effort from all the stakeholders,” said Tresor Chovu, CEO of Cactus Investments in the UK. He listed a lack of infrastructure such as roads, ports and power supply and policies as main deterrents.
“In the DRC the government has already passed the local content law to try and develop this industry. They are making an effort but more needs to be done. We cannot be lagging behind anymore; we need to catch up to the rest of the world. Then investment will flow because there is a lot of money in the market.”
Chovu added that governments should provide guarantees to assist the financial sector in providing loans to prospective developers of the processing industry.
Beneficiation is possible
During the discussion Rwanda emerged as a leading light on the continent and doing the right things in terms of attracting investments into its mining sector.
“We had been looking at the tin industry for quite some time before investing in LuNa Smelter, which is the only tin smelter on the continent,” said Aleksandra Cholewa, Director of Investment & Development at Luma Holding. “We also recognised Rwanda’s strategy and efforts to become a hub in the region, especially for the 3Ts.”
“LuNa Smelter in Rwanda shows that beneficiation is possible in the country,” she added, saying the plant has a low carbon footprint and recently underwent a complete refurbishment. The company has also invested in training local staff: “We have made great progress in the training of our Rwandan staff and the plant is run mostly by our local employees.”
According to Cholewa, regional cooperation will be crucial in the next few years and that the willingness and determination of all stakeholders will be very important.
“Messy Chinese model”
Simon Michaux, who is an associate and senior scientist at GTK (Geological Survey of Finland) concurred: “Rwanda can become the mining hub in the region by facilitating the business model behind each mine and making it easier for the operators.”
He explained that Rwanda could be a supply hub for all the consumables for mines right across Africa and develop a number of facilities such as refineries and smelters for multiple metals. Concerning finance, he suggested that Rwanda could act as a ‘stylised investment house’.
“Then Rwanda will very quickly develop a reputation as the go-to place to make mines happen,” he stated.
Michaux also agreed that infrastructure is often the biggest challenge in the sector. “I keep coming back to the Chinese model, which is a vertically integrated system, from the government at the top to the smallest company at the bottom, there is a coherent plan. It’s messy as hell but there are recommendations there. That seems to be a business model that is successful.”
Several questions from audience members were fielded during the live session by moderator Patrick Obath of Adam Smith International, who noted that the mining industry was moving into what he termed a “co-COVID period, we are learning to live with it.”
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