Mines around Africa are creating economic momentum for new local markets and the spread of technology, supporting a level of social transformation that can be enhanced by more effective dialogue between public and private sector players.

As Cape Town hosts the Investing in African Mining Indaba this week, the focus again includes ways to harness mining’s contribution to inclusive and sustainable growth.

According to Andrew van Zyl, managing director of SRK Consulting South Africa, the sector is an important catalyst in fostering intra-Africa trade, as well as opening up value chains in new technologies with significant social benefits.

“Mines play a vital role – often underestimated – in bringing critical mass to the adoption of valuable technologies that would otherwise struggle to gain a local foothold in communities around Africa,” said Van Zyl.

“Decentralised renewable energy is a good example, which can rapidly transform livelihood opportunities, productivity and general standards of living among communities.”

First movers

He pointed out that mining companies have often acted as critical first-mover customers for innovations in renewable energy, paving the way for value chains to develop into new territories in Africa. This, in turn, allows other stakeholders to adopt and benefit from life-changing products and expertise.

This has occurred with the application of solar power installations at mining operations, thus creating demand for local inventories and expertise for installation and maintenance. Once a mine’s investment in this technology has incentivised the establishment of local service providers, more affordable access by communities in the country or region often follows. This opens doors for small businesses and households to adopt innovations that transform lives and livelihoods.

“These processes can advance transformation even more effectively when a country’s relevant legislation, regulations and incentives are aligned with the economic and technological opportunities,” he explained.

“This is best achieved when the private and public sectors are regularly engaged in constructive discussion about adapting legislation and leveraging investment and innovation – ideally through collaboration based on robust relationships and honest engagement.”

In South Africa, the licensing exemption threshold for solar and other energy plants was increased from 1 MW to 100 MW in 2021, allowing more private generation of renewable energy. The country’s mines have since put in train around 3,5 GW of power projects, in a pipeline that could reach 5 GW by 2030.

Lessons learnt

The Indaba’s focus on collaboration is relevant when considering how technological advancement also requires regulatory innovation, with both aspects – technical and legal – requiring engagement, courage and scientific rigour. Van Zyl highlighted that, while investors and project champions based key decisions on certainty and predictability, all parties still expected the mining sector to continually improve – implying ongoing change.

“Innovating is seldom simple, so it does require a commitment from clients, professionals, operations and government bodies to consider new ideas and technologies in the context of lessons learnt,” he said.

“This means reflecting carefully on what has worked in the past or elsewhere and applying innovations with the flexibility to make adaptations whenever necessary. We also need to have the courage to share the reasons some innovations have failed as this facilitates progress, helping others avoid making the same mistakes.”

He encouraged more discussion on ways to build new ideas into the mining ecosystem at minimal risk, a process that demanded honest assessments of past performance. This approach applied as much to technical aspects of mining as it does to the policy and regulatory framework.

“The mining sector – globally and in Africa – has the advantage of extensive studies and reviews of initiatives that have made a difference,” he said.

“These range from equipment performance to local beneficiation strategies and are all vital to how we learn from our past experience.”

Multiplier

He reiterated the figures shared at the Mining Indaba by the Minerals Council South Africa, which showed how mining supported nearly 900,000 jobs and the livelihoods of 3,6 million South Africans. Minerals Council South Africa CEO Mzila Mthenjane noted that mining is a powerful multiplier and as such, growing mining grows the economy and jobs

Van Zyl noted that fostering the impact of mining also meant strong global relationships on a project level. With the growing involvement of China-based mining companies and financial institutions in Africa’s mining sector, SRK Consulting (South Africa) regularly collaborated with colleagues across its practices in China.

“This kind of technical collaboration is always rewarding – facilitating sound communication and expectations across the project pipeline,” he said. “This has particularly supported our work in the Democratic Republic of Congo, Ghana, and Zambia, but also in a growing selection of other countries around the continent.”