Poor mining policies in Africa hamper new investment

Wed, 15 Feb 2017 10:37:48 +0000

By BUUMBA CHIMBULU

POOR mining policy in Africa is hampering the search for new mining investment, says a partner at the global legal practice Herbert Smith Freehills, Peter Leon.

Mr Leon said as a result the development cast a shadow over the continent’s longer-term economic growth.

He was speaking at the annual Mining Indaba, the world’s largest mining investment conference, which was held in Cape Town, from 6-9 February 2017, where investors expressed concern over poorly thought-out mining policies that affected investment.

Some of the countries mentioned as having unstable policies include Zambia, Ghana, South Africa and Tanzania.

Speaking in a recent interview with Mining for Zambia, Mr Leon said because of poor policies certain exploration companies pulled out of Zambia, and many mining projects were abandoned or deferred, representing a potential investment value of “billions of dollars”.

Mr Leon’s reference to Zambia related to the numerous changes made to the country’s mining legislative framework and mining tax regime in the past decade.

“If African governments begin to embrace the essential conditions for investment in the mining industry, and if mining companies accept the principle of mining-led sustainable development, there is no reason to think that mining cannot significantly transform the economies of Africa’s key mineral producers,” he said.

He said many African countries made rash and unpredictable changes to their mining regimes, creating regulatory uncertainty and harming investor confidence.

“Similar dynamics played out in Guinea, Tanzania, and Zambia and, of course, South Africa, where amendments to the Mineral and Petroleum Resources Development Act proposed in 2013 have entered the fourth year of legislative limbo,” he said.