Appraisal of existing institutions dealing with minieral resources development in the African member states

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m

1

Distr.

LIMITED

E/CN.HAON.eo/7

^ December 19^0

UNITED NATIONS

ECONOMIC AND SOCIAL COUNCIL <-t*u maL^

ECONOMIC COMMISSION FOR AFRICA

First Regional Conference on the Development and Utilization of Mineral Resources in Africa

Arueha, Tanzania, •%-& February 1981

Appraisal of existing institutions dealing with raineral resources development in the African member States

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ANNEXES

CONTENTS

I, Introduction • •,««, *,••*•*•*«*••••••«»•*•*••••»••**•

II, Position of the mining sector in the economies of ,v African member States ••*.<. i**.»•••••**•• ••♦♦iii

III* Central government institutions for the management and

planning of mineral resources development •.•••*••v 17""37

IV, Government departments dealing with geological

research and the exploration of mineral resources

in African member States ■ «mmi»mi

V# Mining sector of the economy and institutional framework for the exploitation of mineral

resources in African meabcr States •-■•*••••««^t«*»

A. Objectives of the mining sector •••••«•>•*•••••»«

B« Specialized mining departments

C, State and parastatal mining corporations 69*78 D, Private sector in the mining industry 79^4

VI, Manpower training facilities as a major pre requisite of mineral resources development and establishment of a natinnal infrastructure of

scientific research institutions ....,.•*..•••••••• 85-96

VII. Major trends and problems in mineral resources development in Africa and strengthening of mine national institutions dealing with the process

Annex I - Share of mining and quarrying sector in the gross domestic product in constant 1970 prices Annex II — Government institutions and parastatal

organizations in African member States

Annex III - Universities with geology and mines departments

Annex IV - International mining companies and their investments in Africa

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Introduction

1, 3h the context of the Plan of Action for the Implementation of the Monrovia

Strategy for the Economic Development of Africa adopted by the Assembly of Head of States and Governments of QAU on 28 April 1S80 at Lagos, the action-oriented programme and proposals lay renewed emphasis on the effective control by African member States over their natural resources and on harmonization in the formulat ion of national policies for the exploration* exploitation, conservation,

processing and marketing of those resources as indispensable factors in the general socio-economic process of the above-mentioned States.

2. In order to achieve such control7 African States will obviously have to

strengthen the existing national instifcuticinal frameworks' dealing with acceler-*

ated mineral resources development {surveying prospecting, evaluation,

exploitation, processing, preservation and marketing).

3» It is, therefore, appropriate to examine the present situation and recent achievements of the various entities in tho African member States involved in formulating national policies and. implementing national programmes in the field

of development of natural, and especially, mineral resources.

4« The aspirations of African nations are very often associated with the full utilization of Africa's tremendous mineral potential, but now, unless the

African member States urgently improve their competence in negotiating new terms on which such resources ar$;exploited, processed for domestic utilization and exported, African economies will continue to fail to secure the maximum

benefit from these activities.

5* During the last two decades concerted efforts have been made by the

African member States, with appropriate^,technical assistance from the rest

of the United Nations community., to expand their capacity to use their vast

mineral resources and reserves for development and to establish an infrastructure and an institutional system capable of formulating national polcies and

implementing programivmies on all aspects of mineral resources development.

5. The principal element in a strategy "designed to formulate these national policies, to secure effective national control over natural resources and to achieve maxinnim benefit from the utilization of mineral resources is the establishment of an appropriate national infrastructure and institutional

framework dealing with mineral resources development at the national level. It should be highlighted that most of the African member States have taken serious steps to find ways and means of strengthening their national geological and mining institutions laying emphasis on the essential factors oC dynamism and

increasing self-reliance.

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7. Understanding the crucial role of geological investigation and the mining industry in the accelerated economic development of the member States, the . ° African economic community, taking into account both national aspirations and ' regional needs for co-operation, caue to the conclusion that, without compre hensive knowledge on the present status of the institutional framework dealing with mineral resources development, it would be impossible to achieve further progress in this process at the national level or at the subregional and

regional levels-

8. A short study of existing mineral development institutional structures

in the African member States will folio:/*

Position of the mining sector in the economies of African member States 9»- There are wide variations among African member States in the degree of mineral resources development and the countries' dependence on it. The

general trend is that minerals in the African member States are mined in ever increasing quantities, but because of world economic stagflation, depression on the world minerals market and the fluctuation of world prices for raw materials, the profits of the member States fell during the last decade and the current situation leaves much to be desired.

10. The share of the mining industry of the African developing countries in the formation of the gross domestic product in constant 1970 prices decreased steadily from 10.59 per cent in 1970 to 7.25 per cent in 1978' (see table l),.

11. On the basis of statistical data on the structure of the gross domestic product in many African member States, it was possible to conclude that the mining industry contributed a significant percentage of their total domestic

output.

12. From an economic point of vie:;, it would'be possible to divide all African member States into four groups in accordance with the importance of

the mining industry and its contribution to the formation.of the*gross domestic

product (GDP)s

(2.) The first ,?rou? of member States is represented by countries in which.

the mining sector contributes more than 10 per cent to the formation of GDP.

This group includes: Algeria (above 12 per cent), the Libyan Arab Jamahiriya (34.5 per cent),Mauritania (30.5 per cent), Guinea (13 per cent), Sierra Leone (14.2 per cent), Liberia (25 per cent), Nigeria (13 per cent), Gabon (H per cent), Zaire (17 per cent), Angola (10,5 per cent), Namibia (30 per cent), Zambia (23.5 per cent), Zimbabwe (iO.l per cent) and Botswana (IO.5 per cent)j

(£) The Second group of member States, with a moderate level of mineral

production amounting to from 1-10 per cent of GDP include: Morocco (* per cent), Tunisia (4.9 per cent), Egypt (2.4 per cent), Senegal (l.^2 per cent), the

Niger (2 per cent), Ghana (2.2 per cent), Togo (5 per cent), Somalia (3 per cent), the Central African Republic (4.2 Per cent), the Con^o (3.2 per cent), Rwanda (1.7 per cent), Swaziland (5.5 per cent), the United Republic of

Tanzania (1.12 per cent) and Uganda(l per cent before the civil war, 1979);

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s) third group of member States, with a relatively small mineral

producing capacity contributing up to 1 per cent of (35P, includesi the Sudan

(0«6l per cent), the Upper Volta (0.6 per cent), the Ivory Coast (0.22 per cent), Benin (0.25 per cent), Cape Verde (0.4A per cent), the IMited Republic of Cameroon (0.57 per cent), Chad (0.6 per cent), Sao Tome and Principe (0.A3 per cent), Lesotho (0.6 per cent), Malawi (0.10 per cent), Mozambique (0«33 per cent), Madagascar (0.56 per cent), Mauritius (0.12 per cent), Seychelles

(0.47 per cent), Kenya (0o5 per cent), Ethiopia (0.25 per cent), Mali (?) and Burundi (?)$

& The fourth group of member States is represented by countries

without notable raining activities in their economies and consists of the

Gambia, Guinea-Bissau, Equatorial Guinea, the Comoros and Djibouti.

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Table 1. Percentage of mining iiLl^formation^of jWrican Cross Domestic Product S/ ' ■ ?"§ S-An millions gfj£J^11^£D""" ~*~ r" » S 197° 1971 1972 Total GDP 52243 55047 57 905 61022 5^127 ^^l

Mningand

quarrying 5585 5349 5 435 5 662 5 293 4 991 5 544 ^723

Percentageof... mininginthe

^Li±i9 9<7V s>33 9o27 £-25 75^ 7e?/ 774

;r Source, Brtl»ted on the basis of data provided by the Statistical Division of EGA, 1978. a/ Zimbabwe figures are not included.

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13. In spite of considerable efforts wade by the African member States to develop their mining sectors dur'.n- the last decade, in most African countries with the exception of the first crou^, this sector of the economy remains relatively small in.the formation of the gross domestic product,

Moreoverr Angola, Guinea; Zaire and Zambia, for exaraple, which are major mineral producing States with resources of oil, bauxite, diamonds and copper, have during the.last fey years suffered from chronic balance of payments deficits, depended on foreign assistance and very slowly expanded employment possibilities for their indigenous popjxLations as a result of widespread inflation on the world minerals -larkets and a decrease of mineral export

revenues.

14» Such a situation can be explained by the fact that during the 1970s the multinational inining corporations very sharply reduced investments and technical assistance to the. mining industry of co.T.e African member States because of a political reorientation and instability in some African subregions, the national ization of foreign fining enterprises and the deterioration of terms of trade on the world minerals marketse

15*.. Nevertheless, in .general terms the raining sectors of the economies of the African member States contribute significantly to the general economic develop ment of these States, to an increase in employment opportunities for the

indigenous population and to income generation in the domestic economies.

15. Taking into account the importance of the mining sector in the economies of African member States., an attempt will be made to review various aspects of mineral resources development with particular emphasis on the range and quality of the national institutional systems dealing with this development.

Central ^overiuient institutions for the ;as,na,7eiaent and planning of mineral . resources de^ alopment

17« The Government of z.ny African member State has full responsibility for mineral resources development as it comprises an integral part of its national economic policy0 Like other govern*-..ant duties, this development can be

implemented only under govsr-i ie:ri; contr-ol anrl regulations,

18. Only a central government institution, which should be at the ministerial level,, can carry out these functions and responsibilities*,

19« Tlie structural organization z-nd the concerns of such government

institutions vary from State to State in.Africa. For example, Algeria has given all responsibility for mineral sector development to the Ministry of

Industry (Direction des I/lines et de lc. Geologic)? Botswana to the Ministry of

Mineral and Water Resources, the United Republic of Cameroon to the Ministry of Mines and Energy- tlie Upper Volta to the "l.ianistere du commerce, du

developpement industriel et des mines": Ethiopia to the llinistry of Mines, Energy and Water Resources, tlie Gambia to the Llinistry of Agriculture and Natural

Resources, Guinea-Sissau to the Commissariat d'etat aax ressources naturelles,

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Kenya: to the Ministry of Natural Resources and Environment, Libyan Arab

Jamahiriya to. .the ivlinistry of' Industry and Mineral Resources, PfladagascEr to

the Ministere de I.1 econor.de et du commerce, Nigeria to the Ministry of Mines and Power, Rwanda to the I.Iinistere des .nines et des cerrieres, Sierra Leone to the Ministry of Lands and Lanes, Swaziland to the Ministry of Industry, Mines and Tourism and. Chad to the Ministry of Public Works, Mines and Geology*

20, Regardless of the naue of the.central governmental institution and its general functions and responsibilities, it usually carries out two fundamental tasks which must be recognized:

21. Firstly, the central government institution is responsible for planning, supervising and implementing primary geological surveys and snapping, in other words, for having adequate information about the geological structure of the countries and for ensuring,that such information can be made available to other ..sectors of the national economy. The governments of soue African member States

such as Algeria, Egypt, Ethiopia, Nigeria, Guineay the Congo,' Mozambique and . others have exclusive responsibility for primary surveys and geological mapping*

Other member States, with limited geological and mining activities or economic activity in general, assur.ie some tasks, such as exploring only for certain minerals or in certain areas, and leave the country's primary geological survey and mapping in the hands of private firms, transnational corporations.

Generally, the primary task of the central governmental institutions is to implement and co-ordinate hdneral resources development in accordance with policy, formulated by the State with view to obtain better geological knowledge about the territories and utilization of country i.iineral wealth,

22, Secondly, the central government institution takes charge of the exploit ation of the country's natural resources for the benefit of the country. Its functions are uainly ..lana^erial (planning, finance, personnel policy,

administration) and technical '(feasibility studies, construction, choice of

equipment, development of infrastructure, environmental protection, operational)

and are related to the process of mining and the utilization of discovered mineral deposits in the countries. These functions are usually assumed by the mining or iviines departments of the central government bodies, i.e. the state ministries.

23. During the last decade, with increased impact of Africanization, all stages of mineral resources developnent, froin initial geological investigation to processing and r::arketinj of raw materials, are becoming largely a

responsibility of the State or of the state-owned corporations. This process is being implemented by many African member States and should be accelerated in order to realize full soverei jnty and control over the develop ment of their natural resources,,

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24. The, Governments pf the African Member States, through geological survey departments and mining.authorities are defining and Ic^l-nenting national

mineral resources developnent policies. •

25.^ Although the majority of African member States understand the crucial need for collective self-relitJice in the mining sectors of the economy? they are unable to establish an adequate institutional framework for geology and ainiurt within the government system because of budgetary constraints and lack

of qualified staff.

25, The Governments of most African member States, whose financial and skilled

manpower resources and equipment are usually very limited, are often obliged to

recruit qualified and specialized technical personnel from abroad in order to

support the newest.and weakest state institutions dealing with national economic development and thus increasingly, depend on foreign technical

assistance. "

?-7-^ Transnational corporations have multinational mechanisms for providing such'technical assistance and adequate investments for the exploration and

exploitation of mineral resources in the member States. During the last decade,

as indicated, the transnational decreased their investments in^the mining

industry and exploration of mineral resources throughout the African continent with the exception of investments for oil, gas and uraniun. Foreign invest ments for r.u\neral resources development have been made only to the "appropriate legal and fiscal regimes" in some member States or to meet the priority needs for special minerals or energy resources in the developed world. In practice, both elements are important in taking a decision to invest. However/the

purpose of this capital, which represents the major source of mineral resources development funds in Africa, is not to develop national institutions dealing with mineral resources. Accordingly all the invested capital has been oriented toward the implementation of the projects of the transnational corporations which aimed primarily at ueetinr/ the needs of the corporations themselves, 2o. In order to exploit themineral resources for national.and domestic needs the^national ministriesof mines and .geology and parastatal organizations with their existing national, institutional frameworks for conducting basic

geological/suafVeys and for raineral resources exploitation have, required and

continue to require other1 sources of financing than can be generated locally.

In Africa little has been done to carry out comprehensive geological investigat ions of African .mineral wealth, because the transnationals exploiting African irdneral resources seek only those mineral that would give them a high return.

Consequently, their exploration and exploitation programmes are aimed at securing supplies of only particular minerals of interest: to them, while

other minerals of great interest to the general economic growth of the African

member States reioain unexplored and. undeveloped.

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29* The sa:.ie holds true.for the collection of geoscientific data and for laboratory'ancl specialized services of national geological institutions•

In general, the various laboratories and bac"-.-stopping services established by the transnationals as part of their activities in Africa, disappeared after the corporations stopped their operations because the national

government institutions could not properl}' maintain these services because of a shortage of funds, qualified personnel and replacement pcrts*

30. The situr.tion is becoming worse with respect to the training of national staff .at all levels and the transfer of know—hou and technology for the national development of mineral resources in Africa. The African member States believe in general, that the role played "oy mineral resources and mining activities in improving the national economy and establishing national institutions cannot be over—emphasized. Geological investigation raid mining activities provide direct and indirect employment for a million Africans and have had a significant impact on national income. However, transnational corporations, even those associated with African Goverra.ients, have accepted a "20 slow" attitude training Africans in the technical and administrative fields of geology and the mining industry,

31• The transnational Corporations used to employ the indigenous population in semi—skilled and unskilled jobs, while administrative and decision-making

posts were given to expatriates* (in some cases, the transnational helped

to create a shortage of trained staff and. encouraged the brain drain by offering to more experienced and qualified nationals work in other regions

at higher salaries).

32. The iiiost serious of the many difficulties involved in the application and adoption of modern exploration and exploitation technologies in African member States is the significant shortage of nationals with e- sufficient basic training end practice,! experience* It should be emphasized thet there is not appropriate use of the regional possibilities for training of African personnel, exchange of experience, transfer of teclmology and know- how and the situation will even become worse if the African -member States dp not fully co-operate for better utilization of the technical assistEjice provided by transnational corporations or do not include to this end proper regulations in the agreements signed between the African ue::ber States and transnational «

33- It is obvious that at the sai'.ie time, the African member Ste.tes' Governments have to develop a different set of incentives with a view to promoting appropriate utilization of the trained national personnel to meet the need of their national economies.

34* For nearly two decades the United Nations, especially UI]DP e.n& UNESCO, have made a very importej.it contribution not only to exploration of minerals in Africa, but also to the training of national staff in mineral exploration.

Now, it is high time, to see where and how this personnel are utilized by the African nember States.

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Conclusions

35» in many African.member States the principal government bodies concerned with mineral.exploration, i.e. ministries of mines and geology suffer from inadequate budget and planning, an inability to formulate mineral development policy or to exercise control over the national preservation of reserves and ineffective decision-malting because of shortage of skilled national personnel, and an absence of practical experience.

As there cannot be a single scheme for the establishment of appropriate national infrastructures to.deal with mineral resources development in

African member.Statest the only solution is to investigate the situation of each country on the basis of its past experience and to draw up broad guide lines for that country*

36. The improvement of government institutions dealing with mineral resources

development requires the careful preparation of a mineral sector development strategy; integrated administration and funds from sources other than trans- nationals6 In principle, this process should involve efforts at national level through reinvestment policies of foreign enterprises briefly and the co

ordinated activities of bilateral and multilateral donors agenciest and .:

the United Nations system playing the role of catalysts.

37» Ifereov^t?j"the':intei>-African" cooperation among"'the member States in thei field of" fIn'ance? and investment's in mineral' resources development may be adequate if all -Governments will agree to establish" the appropriate regional mechanism to finance,the niining sectors development which have a vital priority for industrialization process of Africa in general.

Government departments dealing with geological research and the exploration of mineral resources in African member States . ■

38. Ministries or other government bodies supervising mineral resources exploration almost always play the major role in mineral prospecting through their national geological survey departments. In some countries this role is entrusted to a specialized parastatal organization, such as SONAREM or SONATRACII in Algeria, in other member States, such as Angola, it played by

scientific research institutions like the"Direction de 1'institut national

de la geologie*";"; ' ' ...

39* The main functions of the government institutions dealing with the . exploration of mineral resources includes

General geological study of the country3

(b) Geologicalji geophysical, geochemical and sometimes, hydrogeological

mapping including reconnaissance work and detailed large—, medium- and small-scale mapping!

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(c) Comprehensive examination of mineral indications and ore zones

with a view to determining the direction of further exploration and to investigating the paragenesis of 'deposits or mineralized zones to facilitate possible geological and economic interpretation;

(d) Applied and fundaxiental geological research;

(e) Collection, conservation and dissemination of geological data

and maps|

(f ) Direction of a geological museum to maintain collections of

rocks, minerals and ore samples, and the careful and systematic

maintenance of drill holes, caves and the like,

40, In general terms, national institutions for geological surveying

constitute only one element of a national mineral sector and must be set up as autonomous bodies under the direction of principal government establishments such as the Ministry of fanes or Ministry of Mines and Geology.

41• The African member States have various approaches to planning national mineral sector -developmentj they can select the basis on which a country should develop its sector, whether private, public or mixed. The choice of

one of these options or a combination thereof determines"tne structure of an institutional framework for laineral resources development, which should also be thestructure for an adequate institute for geological surveying, fror"' example the African member States north of the Sahari Algeria, the Libyan Arab Jamahariya, Egypt) prefer State-run mineral development while the countries of the Central* .West snd.-East African subregions select a mixed sector approach taking Into account the characteristic features of the

sector. Oily a,_,few countries sometimes invite the private sector to organize geological surveying or to search for specific minerals, except for gas and oil where the activity is mainly trusted to the transnational companies, 42, In any case adequate facilities including buildings, equipment,

laboratories and■transport and highly specialised personnel "are prerequisites to implement any mineral surveying or draw up an inventory of mineral "

occurrences in a country. Consequently, the' developing countries in Africa should have adequate budgets and equipment and should offer incentive's" ancF adequate salaries in order to attract Qualified personnel with a view to"

promoting; mineral exploration and development at desirable levelc. L' 43. At present, several African member States in the Central, West and East African subregions are not in a position to provide adequate facilities and financing for mineral resources development because of other national priorities. Some Governments have taken action to provide additional means of promoting mineral exploration, research and development by seeking bilateral and multilateral technical assistance or by inviting multinational companies to contribute to this sector of the national economy-, Algeria, Guinea, Liberia, Nigeria, Gabon, the Congo, Zaire, Angola, the United Republic of Tanzania, Mozambique, Ethiopia and others are planning to develop their mineral sectors on the basis of bilateral as well as multilateral technical assistance, which will be closely associated with the national institutional

frameworks.

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44« Usually, the national Institutional fra.iei:or"cc are large, bureaucratic machineries responsible for planning, supervising and promoting various activities of the national ecouony. Tie national institutions can provide various services,' but their scope depends to a large extent on the stage of general econoi'.iic development -of- tins -cotanti^rconieerned^ as well as the availability of technically qualified national who can develop, manage and supervise programmes 'of syste..iatic geological investigation.

45« 3h some African uember States, such as Algeria, Tunisia> Egypty - ■"■ ■ Morocco, the Halted Republic of Tanzania, Zaire, the Congo, Nigeria, Ghana, Sierra Leone, etc. the number of nationals graduates-with skills-in geology and mining in the schools, institutes, universities and other governmental and seui-governmentcl institutions in the coviitriea, is relatively high or is continuously increasing,. Even in these countries a-iong the nationals who have sufficient academic background, there is a shortage of professionals . with adequate practical experience, which makes it difficult for them to relate to the complexity of today's raining industry ?,n& to assign priorities

in the geological or mining sectors. .

46* Although .accTuirin.q this experience is a very gj-°^ oroce_s1£,ijanf

member 3tates gtill depend on expatriates to meet their scientific and

technological requirements, the dynamic changes in the African developing countries show that the situation is changing rapidly and a gradual build-up qf national experience is a3parent» Nationalization of the uiining industry,

(or establishing of national..operating institutions in African member States has resulted in a rapid increase in the self-awareness _snd independence of

thei national stg-ff e .

47- Very often the national scientific personnel, university faculties in geology or engineering take also part in t'ie worli of the national geological surveys by formulating, and carrying out national .aineral projects.

Conclusions

4G> Tiie recent experience of so;ne :;ie:nber States in Africa with regard to raineral resources development or the establishment, of a. viable ^eqlo;^ical.

survey departuent shows the.t there is no £i:i?le fjiroacli to solving the large number of problems involved in establishing these institutions.

It should be possible, however, to draw up only broad guidelines for such wor'.c.

Qf course, any type of organization or government institutional framework

dealing with mineral resources development should be defined by the mineral

policy legislative system and interconnexions with other sectors of the

econoioy of the country coiiceriied,*

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49- Several of United Nations documents have recommended joint schemes for the establishment of various institutional infrastructures in the developing countries at the different stages of .mineral resources development but it may be difficult to implement these general recommendations as a specific approach appropriate to each developing country in Africa required (see United Nations Publication 3T/ECA/123).

Mining, sector of the, ecoiiouiy and institutional framework for the exploitation of mineral resources xn African member States

A. Objectives of the rajnin,? sector

50# The mining sector .in any member State constitutes only one.element of the national economy, consequently, the national institutional framework concerned with mineral resources must .be designed to fit into the infrastructure of the division responsible for the country's economy as s. whole,

51• The national raining infrastructure has several objectives which, in general can be divided into three main areas:

(a) Formulation" b'f; a national mining-policy, including a i.iining Code and mining regulations and. supervision of their"- application; monitoring ~o*f~'

State—owned parasiafal mining corporations as well as private mining. ' :

(b) Promotion of backward and "forward linkages'to harmonize national . economic development with special attention to the sectors of development based on the utilization of -.Mineral resources? preparation and dissemination of information on possible sites for future mining activities? study of economic, social and statistical data relevant to fining operations in the country and in the world*

(c) Responsibility for the particularly important aspect of technical inspection and mine safety•

52. In order to stiaulate mining activities and to promote national sovereignty over resources in the member States, a specialized body

(or bodies) should function within"the"central government institutional framewar'i in the country concerned. ':.""■■

53. The national system for the exploitation and utilization of national mineral resources .ai.^ht include:

(ej A specialized mining departmentj (b_) State corporations;

(c) Parastatal corporations with private (local and foreign) capital

or mixed mining corporations5

(d_) Private organizations.

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There are also some public specialized organizations such as Chambers of Commerce and other institutions engaged in mineral re; ources development in the countries•

3. Specialized mining departments

54. In any African member State, government institutions for the exploit ation zxi& development of national mineral resources have as their first task the formulation of mineral development policy on the basis of a public, private or mixed system* While the principle of sovereignty over natural resources is the main national guideline, the State can use uany different practical approaches to develop its mineral resources.

55* In the case of Stated-owned industry* there should be a clear understanding that modern aining and processing industries have become so capital—intensive

■aftd the relevant infrastructure so large and that their smooth functioning depends wholly on the ability, managerial' expertise and effectiveness of the State itself. Only some African member States such as Algeria, Egypt, Mauritania, f.'brocco, Nigeria, the Libyan Arab Jainahiriya, Zambia, Zaire, etc* are in et position to establish bi^ mining ventures either with their own resources and some technical and financial assistance from developed countries or as joint ventures with know—how and financial aid from trans national corporations.

55. 2h this' case the mining department should not only evaluate new mining projects as a whole but also exercise great care to provide the national mining development corporations or other national agencies charged with this venture with available geological and economic data in areas such as the assessment of mineral potential and reserves, transport cost factors, production technology and enrichment of ores.

57* As regards all private or ;:iixed mineral resources 'development, the mining department should give more detailed aonsideration to the definition of a .dining code and regulations and their strict enforcement in accordance with the mining laws of the member States.

5C Mining authorities in the member States perform many administrative and legal, functions which help to regulate the ter..is of reference of private mining companies whether foreign or domestic and state mining- corporations with respect to employment, training and environmental and safety conditions. These authorities carry out all legal formalities and have custody of the official registers of mining titles and maps.

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59

In a fei-i countries these activities are handed over to other bodies of the Government, which are largely responsible for planning activities of the mining sector and formulating the ::dning code and regulations according to which the mining depart, lents are entrusted with a particularly important function, i.e, inspecting and ensuring the health, safety and employment

conditions of workers in operating enterprises,

50, Since all the geological, technical and economic data obtained in ..lining activity are of i«ajor importance for further development studies and formulation of mineral policy, these data should be obtained, maintained

and disseminated properly.

The materials, :zz:?g and samples carefully collected will avoid duplicat ion of geological activities and planning errors. This activity will also be sssential in meeting the growing needs, of Governments for self-reliance an* effective sovereignty on "their mtjeral resources. 'In fact, in the Majority of the countries, the effective collection of documentation is often absent.

51. No African member States have the type of data processing facilities - used in industrialized countries. It is; even very rare to find a low-cost manually operated data system providing 'accurate and up-to-date information at the level of-the Alining departments in the African'mer.iber States. It is "

clear that such data banlis can be very advantageous in terns of improved iiineral development planning, better decision-making, and overall control.

52« The supervision and control of the environmental situation in the

countries including land reclamation, elimination of water pollution, waste utilization, the ecological balance, safety and fiscal and legal requirements in accordance uith mining legislation is another function of

^lining departments, which is often neglected.

53. ^ In some African member States, such r.s Z^ire,. Nigeria, the United

Republic of Cameroon, Liberia, Zambia, etc. nining departments have frequently paid more attention to the collection of royalties, issuing of export licenses, exploration and exploitation licenses than to ensuring the observation of

laws relating to safety- health regulations and environmental conditions.

In these countries safety, health regulations and environmental control are

generally, accepted as a component of operating costs and therefore fully passed on the raining corporations, which are not always interested in

implementing all regulations in accordance with national mining legislation.

%* Mining projects are very often situated in remote areas of the country

and contribute to regional development and the building of new infrastructure

in these areas. The ministry and mines departments should determine whether

responsibility for construction of the infrastructure lies with the public

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Page 15

sector, the private sector or both, la some countries, lihe Nigeria, the Congo? the United Republic of Cameroon, Ghana, Liberia, these responsibilities are shared by the liiining project executing firms ;and government or parastatal organisations.-■ The catalitic"effect of such regional' development" cannot be over-emphasised for the general'development'02 the econoLiy of the country

concerned as a whole, . ■

551 The r-ining sector of industry should be provided with an adequate

infrastructure for training national personnel engaged in this sector of the econo:.iyo . "he ministry and i.*dnes departments should also have research and development facilities and a specialized unit for supervising planning and controlling the application of modern technology,

66» Tn some countries research units and specialized laboratories belong

to technological-.institutes, colleges or universities, geologcial survey departments, or parastatal and private organizations In such cases the mines departments have to co-ordinc,te their activities

and recor.iiaendatipns

S7» The steady groTfth of fining output in the African ;iie;.iber States calls

for the establishment of strong appropriate national institutional fraine—

uorlzs within state establishments. Such adequate institutional infrastructures? -.«et i.iinistries of mines with specialized ainin/T departments should be provided with highly qualified, experienced national personnel and ;:iodem geological and technological information on the country concerned and on modern world trends. ■ \Speoial attention should be given to the :

use of modem specialized equipment, the training of national personnel tind the availability of both domestic. and foreign fimding for mineral resources development,

60. Ab to the political aspects, the LiLnistry of Lines, throu^i its

specialized mining departiient, is responsible for exercising full control ovar uiineraT res'ources exploitation in the country. Consequently,

dgo of national r.iining policy z-r^d national raining laws and regulations is an ?,bsolute requirement for the ministry's and depart.\eivc's nrtional staff.

G. Sl'ate^and ;3araatatali ^linin,^ corporations

59* Th-^ Gtate-pTjned :-iininrx corporations saeus to be naturally suited to the

Rtr<"^i African State., A number of special international and regional meetings and conferences have focussed on the proble;.: of natio;ializc.tion and

"Africanization" of the mineral industry to promote the urgent revision of the unjust econoruic order established by transnational -.:ining corporations on the African continent.

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70• The state mining represented by State-owned autonomous corporations, which themselves exploit national mineral resources^ might become the__aain institutional bodies in the mining sector of the African member States which carry out these tasks based on a policy of collective self~reliap.cet

71* The state mining corporations in "the African member States meet the

concerns expressed in the Plan of Action for the Implementation of the I.fonrovia Strategy for the Ecor.or.iic Eevelopiaent of Africa where enphasis is. placed on the "establishment of strengthening of national iuachinery for the creation of policies to ensure that proper backward and forward linkages exist botween resources sectors and other sectors of the econoaiy in order to oromote

integrated development" (E/CN.H/78/Add.l, P.54). This means that a state raining corporation, or a parastatal one (a state establishment which is in partnership with the private sector, whether domestic'■ or forei,?n) diould contribute to strengthening the integrated national'economy and promote the

process of industrialization of the country through various.linkages in

national development. V-

72. In general, African mining corporations can be established and operate as a state monopoly or as a parastatal bodies'- in partnership with a foreign or domestic private companies.,

73* The State can have a majority or minority position and has to play an active role in*management* For examplej the Government of Mauritania

established the Societe natibnale industrielle et iainiere (SNUl), which is

composed of several functional divisionst among which the inining division is responsible for the properties and operations formerly belonging to

MlFERMA and SCftUKA. The three main iron ore mines are operated by the Complexe ninier du nord (COMIMOR), a firm fully owned by the parastatal

organization, SNIM. In 1975 SKEA took over full ownership of the Sociate

miniere de la Mauritanie (SOMIKA) which exploits copper sulphates at Akjoujt*

7A« The role of the Government and its share in state i.iinin^ corporations differ from country to cotintry and depend on the kind of deposits being worked*

75» Obviously, national mining corporations must help-the Governments of African member States to move toward achieving full control over the utilis ation of national mineral wealth and self-sufficiency in the mining sectors of the national economies, For that reason, national mining corporations with 100 per cent State—ownership L.iay become more prevalent in the near future,

76. In Zaire the present ownership structure of raining enterprises is

determined by their importance in the mining sector of the country's econonys

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(a)'""National mining companies which are conpletely state-owned such as

"Gecamines", i.n3A,flKilo-I.ioto", the Kisenge Hanganese liining Company - SiK,

producing 92 per cent of Zairian copper and 100 per cent of its cobalt, zinc, cadMiua, coal, diamonds, gold and r-ianganese;

(b) liining companies -ritl; more than 2.0 per cent of their capital owned

by the~State, for example, the industrial end :.:ininS company "Sonamki®

producing 85 per cent of Zaire's total cassiterite output;

(cj The companies'with less than 20 per cent State-ownership, such as SGDEOZA, SI.ITF, SCMJQ3UKI and 3AIEI - Zaire. These companies should be considered as joint ventures, with the State having a minority position.

77. The role, of the State in the marketing of minerals changed completely with the establishment in 1974 of the*Zairian company SCZACOII for the market

ing of raining products with the Societe generale dec minerals (SGM) and

Societe generale de la Belgique owning 51 per cent of the shartss a_n4 Gecamines and the Government of Zaire owning the re:naining 39 per cent. SQEACCvI Is helping- Gecaiaines to take-over the. technical side of marketing, through a joint

"subsidiary, company and handles recruitment for this subsidiary... In .this case,

"the Government of Zaire functions as a parastatal holding company with a . partially owned subsidiary.

73# But this process of "Nationalization" should be approached rationally from the view point of its long-term advantages, Hany problems can be avoided through counterpart training which enable national personnel to acquire technical and managerial experience from foreign management teams or expatriates or to be trained at home or abroad.

D. Private sector in the mining industry

79. In Africa, States have an unquestionable desire to exercise full control over their mining sectors but even African countries with well-developed nixing sectorsf such as Algeria, Nigeria., Zaire, Gabon, Liberia, Zambia and Egypt r.-depend to a small, or large.-extent, xm -technical assistance from .

different-sources. While the private or public sector has traditionally

served as the major source of short- and inedium-term financing for small- and mediuu-scale mines, the only source for long-term financing for large- scale projects has been multinational" financing companies, which are able to mobilize technical and financial resources throughout the world and invest them on a bilateral or multilateral basis. In addition, such large-scale projects always depend on the captive market or market infrastructure of the developed countries, over which the multinationals have full control,

80, In Annex IV a list is given of the major transnational and national corporations working throughout Africa, Giant corporations euch as Rio Tinto Zinc, Selection Trust, Lonrho, British Aluminium, U.S. Steel,

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E/CN.14/I-ON.SO/7

Pa/ze 13

Bethlehem Steel, United Carbide, Amax, Reynolds Aluminium, PIIC LiCKTA*

dominate the African mining industry. Froo an analysis of private invest ments in the African mining industry and a comparison of these investments with net profits of the giant corporations, the amount of revenue earned by private firms fro:.i the exploitation and utilization of African mineral wealth is apparent,

Ol. African ;.;e:_iber States thus prefer to depend less on private capital and

to proceed more rationally by subcontracting the implementation of large—scale projects on the basis of intergovernmental agreements. Ih any case, before establishing any State r-iininj; corporation or parastatal organization for the implementation of large—scale projects, in-depth investigation and evaluation are required.

82. The lack of skilled national staff, the insufficient financing and

scientific and technological bacistopping; the duplication of responsibilities and the poor cojB^dination and co-operation between state mining corporations will continue to.handicap the development of mineral resources in many African countries. Member States must therefore strive to develop and strengthen

;administrative and'productive self-sufficiency within the national infrastruc—

ture dealing with mineral resov.rces development and especially within the state parastatal corporations.

Conclusion and recommendations ^

83» The Plan of Action for the Implementation of the Monrovia Strategy for

the Economic Development of Africa recommended by the ECA Conference ox Ministers at its 6th meeting held at Addis Ababa from 9-12 April 1980 to the First Economic Summit of the Heads of State and Government of QAU held at Lagos, Nigeria on 28~<29 April 1930 outlines the major objectives of the strategy for tlie 1980s in the mineral resources sector aiviong which was the

"creation at the national and regional level of the proper scientific, technical and industrial environment necessary for the development and expansion of mineral extractive industries. At this end the first effort should be directed towards the strengthening of the capabilities of the national geological surveys and ;.iining departments" (E/CN. 14/78/Add. 1, p.27),

&4« It is also essential to underline the position of s:.:all-scale mining

activities in the African member States. The importance of small-scale mining, development for rapid economic growth creation of employment possibilities and basic infrastructure is well known. Now the African member States should give the national priority to build up the necessary national-bodies dealing with this problem, especially, for mining of

locally consuued rar.i materials (building stones, fertilizers production, decorative stones, and etc.), for producing the local made mining equipment

suitable for this mining and necessary maintenance service. To our view, the most appropriate steps of the governments should be to create

specialized r.iining co-operatives under the supervision of the State pining corporations.

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faci-li-ties as a .ma j or pr

E/CN.U/MBU80/7

Page 19

Manpower

research institutions

85. The development of mineral resources in an/ country, whether developed or developing calls for the establishment of extensive and costly training facilities"-.' The -African -member -States: have -a. Hide range of such faculties . for training nationals in the specialiied-xxcIgg of thfe mining ma-.try and geological investigation. They can educate Africr.n personnel in mnxng- ■-■-

engineering, geology, geophysics, geochemistry, enrichment processing,

mechanical and technical fields, financing, aaaagerasnt and administration.

86. 'A number of Africans are being trained in-various disciplines of- science antf-technology in about AO universities aud 10 national miningschools,■-,-- •■- institutes and centres in 41 African member States. As qualified professionals are the main prerequisite of mineral resources development, some member States, such as Algeria, Egypt, Libya, Ivory Coast, Ghana, i/Iali; Nigeria, Gabon, ^aire and iviadagascar, have more than one and as i^ny as five departments of geology at the local universities or local mining schools and centres (see Annex Hi.).

87. 'Some se.ni-professionals are.undertaking actual field work and are provided with on-the-job training.' But, in the lottuHrern.the_shortafre of available Qualified national personnel should be considered as the number one problem.

On an average about 2,500 Africans per>ear have received diplomas or certificates at various educational levels but there has not yet appeared an all-African report or survey which could provide information to the ^ African community on the field or sector of che African economies m whicn.

these qualified specialists are engaged. It is high time to shed light on this side of the problems it was mentioned before.

88. The training programmes organised through either bilateral or multi lateral technical assistance, are very often inefficient and ineffective.

Too often they provide fellowships for national graduates, most of whom

could benefit More from practical on-the-jo'o training. Moreover, many

fellowships students do not return hone a^ter training. Those co^mes with the greatest need for specialists or qualified experts have not.

prepared their candidates for tho fellows!^ programme as designed. In addition, the fellowship .programme frequently aims at meeting v..;.^edi of the transnationals or of special assistance (foreign) projects rather than

actual needs of the country's mining industiy or geological survey.

89. And in general, the situation is a^praYat^d by the fact that national

qualified personnel prefer to work for transnational corporations or-

foreign private or public cpmoanies or in scientific research centres

instead of participating in field' activities either because of salary, .

differences or because in many inember States the job of field geologist

or mining engineer is considered unattractive and laclu.ng in prestige.

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90. Frequent lyT,.for. practical reasons, state institutions and national

mining corporations cannot use qualified indigenous personnel because" ctf"~ —"~ ■ their lack of experience or because of the low local salary, level and invite experience expatriates, who sometimes influence r.iineral resources development

policy in the iaeraber States according to their views,

91• Scientific research institutions have been established in soae African member States with a""view to servicing the national geological and pining sectors. As a rule, they have to solve two problems* proper staffing by highly qualified national scientists and researchers and acquisition of the

necessary modern technical equipment.

92. Experienced geologist, mining engineers, and scientific workers dealing with various aspects of national :^ineral resources development are the main asset of research and scientific activities in any country. The Governments oif' the African member States should harmonize scientific and research activ ities within national development programming and invite competent national personnel from responsible private and public organizations to participate in and help to co-ordinate these activities on part-tine basis.

93.v Some member States orefer to engage expatriate experts or specialists to work in- scientific,and research activities in Africa. They do not pay much attention to the training of national scientific staff and have difficulties in recruiting national specialists. For■exanrale, in such countries as Zambia- and Zaire a lot of the personnel engaged in scientific research are expatriates, 94. It goes without saying that the modern equipment will be of little value in the development of mineral resources without qualified national scientists and researchers. It should also be emphasized that nost of the scientific and research equipment available in most member States is out of date, incomplete and poorly iiiaintained. For instance, in some member States, in a single laboratory there r.re several different types of instruments made hy different firms in different countries and even using different systems of measurement, so their maintenance and day-to-day use require a large

number of ^pare parts from various suppliers. The same is true for geological, geophysical arid drilling equipment for field surveying. It is obvious that as soon as possible the African member States have to standardize, the

equipment and materials, to organize inaintenance service and the training of nationals through institutional framework or by joint multinational

effortse

95. Moreover, many scientific research facilities and much equipment have been installed in the African member States solely to implement a specialized project receiving extensive bilateral or multilateral technical..assistance.

When the project is,completed, the facilities and equipment are often left

behind in-the country.in ..unworkable condition.

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E/CN.UAON.30/7

P?.£e 21

95.. Consequently, national institutions must use a rational, approach in

selecting scientific research facilities and equipment in order to save

iiiineral resources development funds. The African menber States should re- qember that the establishment of fully integrated geological and mining

research institutions is a very costly undertaking,, A practical approach^

to solving the problems of specialized research often lies in subcontracting some of it or in carrying'oat research programmes throurh the multinational : centres-for-mineral resources development, whioli are being established under

the auspices of ECA* :

Major trends and problems in mineral resources development in Africa and

strengthening of national institutions dealing with the process

97. There .are-no objective;nor universally applicable criteria.for evaluating

the trends of mineral resources development in the 1980s.

The industrialized world is feeling the considerable pressures of economic stagnation and inflation, ftnd is interested in r.iaintaining steady supplies of raw materials especially energy related resources at reasonable

prices from its traditional markets* ../_... '" T.VJ- -"■■."■

98. /is to the developing world and, in particular, the African member States aim at intensifying mineral resources development through an integrated national and regional socio-economic development programme with a view to increasing the

value of the various minerals available in-the African member States*

99. The development of African mineral resources can help the member States to.gain greater control over their mineral resources and to promote backward and forward linkages* It can ensure the growth" of export earnings and

foreign exchange flows making it.possible to reinvest these earnings in

other productive sectors of the national economies.and it can ;help to increase the added value in the .various' sectors and prowote. national employment s

100c The growing interest of African member States in" the domestic use of mineral resources in African industrialization creates favourable conditions

for both private and,public aft-I national and foreign investments! in the raining sectors of African economies and for pooling African multinational or regional resources in the implementation of national or regional projects

101• Simultaneously, the widespread process of economic stagnation, the increase in prices of energy resources, the development of substitute

industries in the developed countries and the weakness of the local minerals

market in Africa handicap the process of regional mineral resources development.

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Page 22

102, At present, African member States have not adequate information centres providing accurate data on mineral reserves in the country, appropriate levels of training for local personnel, geological fieid surveys, labor atories with relatively modern equipment :and sufficiently developed national infrastructures dealing with the mineral sector. The lack of experienced and skilled national personnel and other short-comings caused by the iapid and,: extensive process of nationalization and participation of African member States in mineral investigation, exploitation and Marketing of raw materials are forces which restrain the growth and diversification of mineral product

ion in Africa*

103. But all these factors are the negative consequences of the rise of national industries in the African member States and will be eradicated gradually as the African economies gain strength in general and more specifically as the minerals market grows and the continent becomes more

industrialized0

104o In view of the significance of mineral resources development, which can provide a sound basis for overall national* socio-economic development, the strategy for the African member States during the 1980s should include the

foilowing3

(s.) At the national level

(i) Each member State should endeavour to take all the necessary

measures through the development of the relevant human and institutional frameworks to exercise full sovereignty over its national mineral resources as well as to attain "self-reliance" in mineral resources development. In particular, measures should be taken by each member States to strengthen its existing national institutions! national geological surveys and mining departments, national parastatal mining corporations, etc.

through the creation of efficient scientific, technical^ industrial and educational support services for the development and expansion of the geological end mining sectors of the African economy, - ■-- ■

(ii) Because of the significance of mineral resources^the wide

spread and accelerated process of nationalization in the geological and mining sectors of the economy and the expanded participation of African mer.iber States (government, public, co-operative) in mineral resources development" and because the development of the mining industry is considered a starting point of rapid industrialization, special

attention should be given to improving knowledge of the mineral

resources of each African country as well as of continental or regional mineral wealth through the preparation of adequate inventories of

reserves and potential reserves, better planning of consumption ratios

and research on the local utilization of known reserves.

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Page 23

> (iii) Particular attention should be given to those raw materials

. whos©T,strategic importance in establishing basic industries, cannot be over-emphasizedc These basic industries will produce intermediate or send-finished products such as: iron and steel, aluminium, base metals*

raw petrochemicals and fertilizers, ceraent and construction materials.

An economic evaluation of the integrated development of mineral resources should be made in accordance with the structural economic changes in the world effected by the energy crisis? new technology and the increasing needs for local mineral consumption in the member States.

(iv) The African member States should continue to strengthen. .

existing national institutions dealing with mineral resources development and conservation at all levels, by attracting all available sources of financing, improving mrket conditions for raw materials, establishing adequate facilities for applied research, specialized services and

training of national personnel, upgrading the production, modern process ing and fabrication of semi—finished products. The harmonization of mineral resources development at the national level creates a favourable conditions for co-operative efforts by the African member States at the intra-African levelo

(h) At the subre/yjonal and regional levels

The African member States should formulate an effective policy and take appropriate national measures to ensure strong intra-African co operation among member States as concerns the regional development of African mineral wealth.

(i) The Regional Conference on the Development and Utilization of

Mineral Resources in Africa sponsored by ECA, will complete the appraisal of African mineral resources and mineable reserves and outline ways of developing mineral resources in Africa, with particular emphasis on regional co-operation among African nations in order to exploit these resources to meet the socio-economic needs of their people.

(ii) Integrated mineral resources development should be given

proper scientific and technological support at the regional level.

National capabilities in the promotion of new methods and techniques, in the development of national systems to transfer know-how and to exchange scientific, technological and economic data in geology and mining should be complemented by the multinational subregional centres for development of .-nineral resources, which will provide joint facilit ies for applied research, specialized services and training in order to solve the problems of a shortage of qualified personnel, dependence on expatriates and lack of adequate specialized services. The active participation of member States in establishing and operating such

African subregional institutions through political and financial

support is vital. A multinational mineral resources centre, located at Dodoma in the United Republic of Tanzania should be fully estab

lished in 1981 and become fully operational by 1984. The establishment of subregional centres for the ftest and North African subregions should

also be considered after 1982.

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E/CH.H/MIN.80/7

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