CAPE TOWN (Reuters) – It should be a match made in heaven. Developing Africa’s vast mineral resources to meet the needs of the resource-hungry economies of China and the rest of Asia.
But if there is one message to take away from this week’s Mining Indaba conference in Cape Town, it’s that there remains a large gap between hopes and reality, and that in much of sub-Saharan Africa mining investment remains challenging, if not in the too-hard basket.
In many cases, it appears that the various stakeholders in mining simply talk past each other, with mining companies pleading for regulatory certainty, preferably on favourable terms, and government leaders pushing their agenda that the industry must benefit all. The main problem is that many African countries have what are effectively incompatible goals when it comes to developing their natural resources.
They want mining companies to invest billions of dollars to provide jobs and tax revenues, but they also insist that the same companies meet high hurdles relating to empowering various groups in the host country.
South Africa, the continent’s mining powerhouse, is a case in point. The country’s mining charter calls for companies to have a minimum of 26-percent ownership by investors from the black majority.
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