Zimbabwe

The calls for the wider implementation of mineral beneficiation have become louder across many developing countries.

The calls emanate from a consensus that there is an inherent advantage for mineral rich countries to establish internal capacity to process their minerals into semi-finished or finished materials.

Author:
Selina Zhuwarara 

The principal advantage of beneficiation is derived from the multiplier effect created by a broader scope of manufacturing and industry capacity.

This consequently ignites economic growth. Notwithstanding the appreciation of the significance of beneficiation, it can be agreed that it is yet to develop and extend at the intended scale especially in Africa.

The reasons for this position are varied but chief among the causes is the adoption of policies, strategies, and initiatives that are not grounded in the solid analysis of economic sustainability.

In order to improve this position, policy makers need to re-align initiatives with domestic capacity, economic viability, sustainability and implementation practicality.

The rapid evolution of technology also requires policy makers to broaden strategies and align them to the trajectory of market and technology dynamics.

In order to achieve the rewards of beneficiation many governments in developing countries need to go back to the drawing board and engineer radical solutions to take the cause to fruition.

Zimbabwe has adopted various local content and beneficiation initiatives over the last few years, some of these initiatives generally include the imposition of levies on the export of unprocessed minerals, the compulsory setting aside of product for domestic processing, the selective restriction of mining consumables that can be imported and the application of fiscal rewards for actions and strategies that support beneficiation and the use of local services and goods.

Regardless of these efforts, beneficiation is yet to successfully extend in scope and capacity within the mining sector.

One such initiative of government was the 2010 Mineral Marketing Corporation of Zimbabwe Regulations which provided for the setting aside of 10% of produce received from all diamond producers.

The intention of the regulations was to create a constant supply of diamonds for the local cutting and polishing industry to access.

Despite the best intentions the initiative failed to produce the desired outcome and consequently the sector has failed to grow as projected.

The lack of growth of the cutting and polishing industry in Zimbabwe is a result of many factors but the main challenges were lack of adequate capitalization and a weak policy framework that ultimately did not incubate the fragile inception of the sector.

The local cutting and polishing industry needs to be deliberately supported in order for it to access capital, technology and markets.

Botswana on the other hand has managed to establish a successful diamond manufacturing industry and key to their success was their ability to take advantage of the knowledge, skill, market access and industrial capacity of their principal investment partner De Beers.

In addition to this synergy, Botswana has considerable diamond reserves which comprise a high proportion of clear gem and gem quality stones. This unique geology enables the country consistent access to high quality stones and thus a quasi-sustainable basis for the creation of a cutting and polishing industry.

This is one of the factors that enabled them to successfully negotiate for De Beers to relocate its international sales operation to Botswana.

Be that as it may, Botswana’s cutting and polishing sector has been noted to incur a high cost of production in comparison to the Indian cutting and polishing industry and this has affected its potential to extend beyond its current capacity.

This shows that the establishment and support of a cutting and polishing industry has to be robust and is continual, it goes beyond having the resource, governments need to look at creating a competitive environment in order to enable the sector to compete with international capacity.

Following from the same, there is need to revise the basis and scope of the establishment of Zimbabwe’s downstream diamond industry in order to mimic the success achieved in Botswana.

Beneficiation policies in the diamond sector need speak to the critical questions relating to access to product, access to capital and technology, skills and capacity, cost of production and demand and access to markets.

It is hoped that the entry of Alrosa into the Zimbabwean diamond industry will yield a revival of the cutting and polishing industry. The partnership presents an opportunity to learn and draw from the experience of Alrosa and ultimately culminate in the revision of policies and initiatives that are sustainable and viable.

The stagnation that Zimbabwe has experienced with beneficiation has also been encountered in many other mineral rich countries. As with Zimbabwe, the causes for stagnation of growth in beneficiation are varied.

However, the main challenges that developing countries are faced with when it comes to establishing and broadening beneficiation are the sustainability and long-term supply of the resource, availability of demand, access to markets, lack of domestic markets, infrastructural deficiencies, energy constraints, technological deficiencies, poor economic environments and skills deficits.

In order to overcome these challenges, countries can look at regional capacity instead of national capacity.

Therefore, sharing infrastructure, resources, skills, technology and markets between countries can become a viable means of approaching the beneficiation initiative.

The SADC Protocol on Mining creates a framework that allows countries to partner constructively on issues relating to the development of the mining sector.

The protocol allows for collaboration on initiatives that support developing human and technological capacity, research, training and the utilization of existing facilities in the mining sector.

The future of economic growth in Africa rests with intra-African trade and regional synergies.

In order to circumvent the limitations of individual nations, collaborative efforts can absorb inefficiencies, infrastructural deficiencies and serve as conduits for the dissemination and sharing of knowledge, technology, skills and encourage economic growth.

For instance, there are approximately 8 diamond producing countries in the Southern African Development Community (SADC) region, that is Botswana, South Africa, Zimbabwe, Namibia, DRC, Angola, Lesotho, and Tanzania. All these countries have the same goal, that is to create sustainable downstream industries for their diamond wealth.

Instead of individually approaching this task, these countries can combine their capacities to establish and supply stones to a regional diamond manufacturing hub.

Not only does this create a sustainable supply of diamonds for beneficiation, it also establishes a wider market reach both regionally and internationally. Each country can reserve a portion of their diamond produce for this regional beneficiation hub.

The model can be applied across different mineral sectors and the location for each respective hub can be selected based on which country in the region has the best conditions and capacity to sustain hosting the beneficiation center.

As highlighted above, one of the key components of establishing successful manufacturing and beneficiation sectors is the access to reliable and adequate energy supplies.

This discussion is pertinent in developing countries because internal capacity to satisfy energy requirements are generally still being developed. In the context of beneficiation, the access to adequate energy cannot be tabled without a corresponding reference to the development of clean energy sources.

The last two decades have made it abundantly clear that climate change is an urgent global challenge that poses a threat to the existence of humanity. There is resounding consensus that our energy sources and consumption needs must change in order to ensure that humankind can advance and develop without violating the safe boundaries of earths pliability.

Following from the same, the drive for alternative energy sources has garnered significant momentum over the few years. Mining finds itself at the heart of the climate change discussion because while it has historically enabled and provided the ingredients of industrialization and technological advancement through metals and fossil fuels, it is now faced with the need to transfigure its focus in the age of climate change mitigation.

While the need for fossil fuels will not immediately cease, policy makers in developing countries need to be structure mineral resource plans and specifically beneficiation initiatives with a bias on renewable and clean energy sources in order to foster sustainability.

The global mining industry is currently shifting towards smart and sustainable mining which is aimed at limiting the impact of extractives on the climate and environment.

This strategy is also seen as a long-term cost-effective model for the sectors viability. This is a cause that now needs to start taking center stage in the mineral resource plans of developing countries.

The era of aggressive climate change mitigation has also brought about the proliferation of new economic models. One such model which looks at the efficient use of minerals and energy is the concept of the circular economy.

A circular economy simply means the adoption and implementation of various strategies aimed at efficient use of resources and the reduction of waste and re-purposing of waste. In the case of mineral resources, it means continually re-using, re-cycling and re-purposing scrap.

Metals and precious minerals can be repeatedly re-used instead of discarded. A good example of this model are projects that embark on large scale smelting of scrap which are now producing a significant portion of raw materials required for car manufacturing requirements. International companies such as Novelis re-purpose scrap aluminum for Jaguar Landrover and are their sole aluminum supplier.

In Japan companies such as JX Nippon Mining and Metals, Sumitomo Metal Mining and Mistubishi Materials are pioneering the re-purposing and extraction of essential minerals from scrap metals.

In the event that this mineral recycling industry can increase its output, it can fundamentally affect the supply and demand dynamics of mineral resources.

In this light it is no longer adequate to build mineral resource policies based on the demand dynamics that currently subsist, developing countries need to broaden the capacity and value chain of their mining sectors beyond supplying raw minerals or beneficiation of minerals and look into integrating new economic models such as circular economies and the opportunities it presents.

The minerals market is constantly changing in line with the advancement of technology and in response to the global issues of the day. This calls for robust and dynamic conceptualization of mineral resource policies. It is no longer adequate to rely on merely having significant mineral reserves.

Countries need to be able to develop a competitive environment and competitive policies that support maximization of value and imbed sustainability.

Indeed, the world will always need mining, but the scope and dynamics of mining are changing in a manner that requires policy makers to look ahead and develop strategies that are relevant to today and the future.

Such strategies also include utilizing the strength of regional synergies in combating knowledge, infrastructural and technological deficiencies in the mining sector. It also requires incorporating measures that promote sustainability.