27 – 30 October, 2009 Ababa, Ethiopia

1. UNECA REGIONAL IMPLEMENTATION MEETING (RIM) FOR THE 18TH SESSION OF THE COMMISSION ON SUSTAINABLE DEVELOPMENT (CSD-18) 27 – 30 October, 2009 Ababa, Ethiopia REVIEW ON MINING

2. UNECA SADC MEMBER STATES INTRODUCTION • Africa has a significant mineral sector • Large reserves of diamonds, platinum, gold, etc • Minerals can support Africa’s industrialisation • The African Mining Vision advocates for • “transparent, equitable and optimal mineral exploitation to underpin broad-based sustainable growth and social development” • AMV is consistent with the principles of SD • BUT mining is not inherently sustainable - its social-economic benefits can be sustainable based on the three pillars of SD. DC Tanzania Malawi Angola Mozambique Zambia Zimbabwe Namibia Madagascar Botswana Swaziland Lesotho Mauritius South Africa

3. UNECA SADC MEMBER STATES INTRODUCTION • Review based on para 46 of JPoI • Effective and transparent regulatory frameworks; • Transparency and accountability; • Governance and public participation; • Environmental, economic, social and health impacts and benefits; • Value addition, R&D and technological information; • Artisanal and small scale mining; and • Building human and institutional capacities. DC Tanzania Malawi Angola Mozambique Zambia Zimbabwe Namibia Madagascar Botswana Swaziland Lesotho Mauritius South Africa

4. UNECA SADC MEMBER STATES MAJOR TRENDS AND ISSUES • Generally: • Global metals intensity of use increased • High prices led to mining lower grades - more waste and higher energy use • Economic crisis has led to industry consolidation and increased company bargaining power but exploration has declined • Political and economic climate has improved resulting in higher mining investment in Africa. • Effective and transparent regulatory regimes: • Trend is towards development based policy objectives eg in AMV. DC Tanzania Malawi Angola Mozambique Zambia Zimbabwe Namibia Madagascar Botswana Swaziland Lesotho Mauritius South Africa

5. UNECA SADC MEMBER STATES MAJOR TRENDS AND ISSUES • Also reducing reporting requirements and arbitrary decision making. • Security of tenure has emerged as key issue • At sub regional level, harmonisation of codes of policies, codes and standards is a key trend • Transparency and accountability: • Trend is towards membership of global transparency initiatives • Governance and public participation: • Trend is towards participation of all stakeholders in regulatory processes ie multi-stakeholder approach DC Tanzania Malawi Angola Mozambique Zambia Zimbabwe Namibia Madagascar Botswana Swaziland Lesotho Mauritius South Africa

6. UNECA SADC MEMBER STATES MAJOR TRENDS AND ISSUES • Environmental, economic, social and health impacts and benefits: • Environmental sustainability emphasises land use options and restoration beyond mining • Social sustainability involves intergenerational equity and addressing needs beyond mine life • Trend is towards comprehensive social and environmental impact assessments and use of environmental and social funds • Taxation – equitable sharing of revenue between Govt and companies well accepted. • Value addition, research & development and technological information: DC Tanzania Malawi Angola Mozambique Zambia Zimbabwe Namibia Madagascar Botswana Swaziland Lesotho Mauritius South Africa

7. UNECA SADC MEMBER STATES MAJOR TRENDS AND ISSUES • Improvement of all aspects of the mineral value chain remains the main trend • Increased demand has led to export of ores and concentrates • Artisanal and small scale mining: • Trend is to holistically address poor practice through strategies rooted in broader rural development objectives • Building human and institutional capacities: • Donor support increasingly budgeted based • Also increased donor support for consolidating geoscientific information. DC Tanzania Malawi Angola Mozambique Zambia Zimbabwe Namibia Madagascar Botswana Swaziland Lesotho Mauritius South Africa

8. UNECA SADC MEMBER STATES PROGRESS MADE • Effective and transparent regulatory regimes: • Most countries have rewritten mining codes to attract FDI eg DRC, Nig, Gh, Tz, Zam, etc • Most new codes not development oriented and not based on full stakeholder consultations. SA, Nam, Mal, Tz are exceptions • Trend is to amend contracts due to boom prices eg DRC, Lib, S. Leone, Zam • At subregional level, harmonisation has made progress eg ECOWAS, UEMOA and SADC • At regional level, 2007 Big Table led to ALSF and ISG • ISG process expected to lead to development based mineral regimes and improved SD DC Tanzania Malawi Angola Mozambique Zambia Zimbabwe Namibia Madagascar Botswana Swaziland Lesotho Mauritius South Africa

9. UNECA SADC MEMBER STATES PROGRESS MADE • Big Table also led to Ist AU Conf of Mining Ministers and the Addis Ababa Declaration • Calls on AUC, ECA, ADB and AMP to operationalise the AMV and ALSF • Transparency and accountability: • Many countries signing up to global initiatives eg at least 20 are candidate countries for EITI – BUT none is compliant yet. • Governance and public participation: • Public participation has improved eg SA, Nam, but Govts still see policy as a prerogative • Global initiatives have helped improve governance and community participation. Smaller companies are more notorious DC Tanzania Malawi Angola Mozambique Zambia Zimbabwe Namibia Madagascar Botswana Swaziland Lesotho Mauritius South Africa

10. UNECA SADC MEMBER STATES PROGRESS MADE • Generally Governance and CSR are weakly practiced and discretional • Local participation in mineral projects is weak and not promoted • Environmental, economic, social and health impacts and benefits: • Environmental and social provisions are weakly implemented. Mine closure plans, land use options and social funds are not common • Agreements between companies and communities becoming common eg Mali, Gh, • Most Govts centrally retain mining revenue while economic linkages are weak • Reduction in natural resources conflict eg DRC, Angola, Lib, S. Leone etc DC Tanzania Malawi Angola Mozambique Zambia Zimbabwe Namibia Madagascar Botswana Swaziland Lesotho Mauritius South Africa

11. UNECA SADC MEMBER STATES PROGRESS MADE • Value addition, research & development and technological information: • This remains very underdeveloped with no effective infrastructure and strategies for R & D and innovation, except for SA • Support for value addition to gemstones has been improving eg in Tz, Zam, Gh etc • Harmonisation frameworks emphasise this. • Artisanal and small scale mining: • Few countries provide technology and other support facilities eg Nam, SA • Yaonde vision provides guidelines. CASM has an African branch DC Tanzania Malawi Angola Mozambique Zambia Zimbabwe Namibia Madagascar Botswana Swaziland Lesotho Mauritius South Africa

12. UNECA SADC MEMBER STATES PROGRESS MADE • Building human and institutional capacities: • Donor support for mining reform has increased eg Nig, Gh, Moz, Tz, Zam, DRC, Lib • Areas of support wider eg environmental programmes, capacity building, ASM (Global Mercury project) • Retention of professional staff a continuing problem DC Tanzania Malawi Angola Mozambique Zambia Zimbabwe Namibia Madagascar Botswana Swaziland Lesotho Mauritius South Africa

13. UNECA SADC MEMBER STATES CHALLENGES AND CONSTRAINTS • Effective and transparent regulatory regimes: • Creation of sustainable wealth from current mineral regimes is challenging. Regimes are not SD compliant • Capacities to implement regimes are very weak across all areas • Pace of harmonisation is very slow • Transparency and accountability: • Resource rents are not transparently used for long term development • Transparency does not extend to other high value minerals, eg coltan and gold • Initiatives are also voluntary while partners’ capacities are weak DC Tanzania Malawi Angola Mozambique Zambia Zimbabwe Namibia Madagascar Botswana Swaziland Lesotho Mauritius South Africa

14. UNECA SADC MEMBER STATES CHALLENGES AND CONSTRAINTS • Governance and public participation: • Community participation remains problematic – mismatch in expectations, representation, capacities, what to legislate? etc • Lack of venture funds limits participation • Environmental, economic, social and health impacts and benefits: • Capacities to negotiate, implement and monitor compliance of economic, social, and environmental provisions are weak • Value addition, R & D and technological info: • Creation of value added is elusive in absence of requisite infrastructure and capacities • Costs of infrastructure projects high eg energy DC Tanzania Malawi Angola Mozambique Zambia Zimbabwe Namibia Madagascar Botswana Swaziland Lesotho Mauritius South Africa

15. UNECA SADC MEMBER STATES LESSONS AND RECOMMENDATIONS • Effective and transparent regulatory regimes: • Various policy regimes have not delivered on long term sustainable development in Africa • Rec 1 – invest in new development based mineral regimes as envisioned in AMV. • Rec 2 – Formulate an action plan for implementing the AMV • Rec 3 - AUC, UNECA, ADB, should work with RECs to create capacity to formulate and implement new regimes • Rec 4 – Improve pace of harmonisation of policy frameworks • Rec 5 – Operationalise the ALSF to enable improved mineral contracts. In the short term, create a fund to provide access to advisors DC Tanzania Malawi Angola Mozambique Zambia Zimbabwe Namibia Madagascar Botswana Swaziland Lesotho Mauritius South Africa

16. UNECA SADC MEMBER STATES LESSONS AND RECOMMENDATIONS • Transparency and accountability: • Transparency and accountability difficult to achieve in Africa • Rec1 – Countries should seriously adopt and apply international initiatives • Rec 2 – Develop a think tank stakeholder approach to addressing issues • Rec 3 –Strengthen capacities of oversight bodies ie NGOs, CBOs, Legislature, etc • Rec 4 Use resource rents efficiently to capture development imperatives • Rec 5 – Develop similar systems to KPCS for coltan and gold DC Tanzania Malawi Angola Mozambique Zambia Zimbabwe Namibia Madagascar Botswana Swaziland Lesotho Mauritius South Africa

17. UNECA SADC MEMBER STATES LESSONS AND RECOMMENDATIONS • Governance and public participation: • CSR and participation cannot continue to be exercised in a discretional manner • Rec 1 – Embed CSR in some form of policy or legislation to promote community participation and benefits sharing • Rec 2 – Promote participation of nationals in mineral venture through policy and legislative provisions • Rec 3- ADB should consider establishing venture capital funds to promote African entrepreneurship in mining projects • Rec 4 – Introduce mineral concessions that promote development and community upliftment DC Tanzania Malawi Angola Mozambique Zambia Zimbabwe Namibia Madagascar Botswana Swaziland Lesotho Mauritius South Africa

18. UNECA SADC MEMBER STATES LESSONS AND RECOMMENDATIONS • Environmental, economic, social and health impacts and benefits: • Legislative provisions are not sufficient without will and capacity to implement them • Infrastructure costs are high in remote areas • Rec 1 – Ensure that ESIAs are mandatory and include obligatory environmental and social funds • Rec2 – Open up mineral contracts to broader scrutiny by informed stakeholders • Rec 3 – Establish capacity for resource based development corridors for collateral use of infrastructure • Rec4 – Continental bodies should speed up implementation rate of STAP programmes DC Tanzania Malawi Angola Mozambique Zambia Zimbabwe Namibia Madagascar Botswana Swaziland Lesotho Mauritius South Africa

19. UNECA SADC MEMBER STATES LESSONS AND RECOMMENDATIONS • Value addition, research & development and technological information: • Pronouncements, even inclusion in policy is not sufficient to create value added • Rec1 – Provide specific policy direction and incentives to create value added • Rec2 – Invest in creating knowledge based institutional capacities (HRD, R&D infrastructure, innovation systems, etc) • Rec3 – Create special purpose funds to support knowledge creation eg innovation fund • Rec4 – Invest in greater geo mapping to identify added mineral resources DC Tanzania Malawi Angola Mozambique Zambia Zimbabwe Namibia Madagascar Botswana Swaziland Lesotho Mauritius South Africa

20. UNECA SADC MEMBER STATES LESSONS AND RECOMMENDATIONS • Artesanal and small scale mining (ASM) • Best practice is known but results but does not reflect practice on the ground • Develop ASM assistance programmes and regimes that are rooted in rural development objectives • Building human and institutional capacities • Donor assistance programmes are not sustainable in the long term • Rec 1 - Build sustainable internal capacities through deliberate training and retention schemes • Leverage donor support to build capacities in various areas of the mineral management chain DC Tanzania Malawi Angola Mozambique Zambia Zimbabwe Namibia Madagascar Botswana Swaziland Lesotho Mauritius South Africa

21. UNECA SADC MEMBER STATES CONCLUSIONS • Africa has a vibrant mineral sector BUT it is not sustainable • AMV provides opportunity to make it sustainable • Conditions for achieving this have been outlined • These can be met as other previously resource driven countries have demonstrated DC Tanzania Malawi Angola Mozambique Zambia Zimbabwe Namibia Madagascar Botswana Swaziland Lesotho Mauritius South Africa

22. UNECA THANK YOU ! United Nations Economic Commission for AfricaSouthern Africa OfficeP.O. Box 30647 Lusaka, Zambia Tel.: +260-211-228502/5Fax : +260-211-236949/234757E-mail: srdcsa.uneca@un.orgWeb: www.uneca.org/eca-sa