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AFRICAN governments should not be intimidated by global mining companies in their quest to ensure their citizens receive fair returns from exploitation of their natural resources, Western Australia premier Colin Barnett said yesterday.
Speaking on the first day of the three-day Paydirt Africa Downunder Conference in Perth, Barnett said while capital investment required a safe environment for investment, resource companies would always pursue resource deposits.
“The mining industry will do what it does, but African nations need the courage and political will to ensure that a fair return from the projects are derived,” he said.
The premier’s sentiments come at a time when value addition and beneficiation has become a regional agenda with last month’s Sadc conference endorsing the approach as a panacea to unlock Africa’s economic potential.
President Mugabe, the new Sadc chair, has said the era of raw material export from the region must end and urged fellow member states to move with haste towards implementing value addition and beneficiation policy.
African Union chairperson Dr Nkosazana Dlamini Zuma, who also attended the Sadc summit held in Victoria Falls, also underscored the need for Africa to liberate itself economically through beneficiation and value addition.
Zimbabwe has made great strides towards unlocking its economy through value addition and beneficiation, anchored in its economic blueprint, the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim-Asset).
Pessimists have tried in vain to paint a negative picture about Africa’s economic empowerment policies on the shaky ground that such moves repel foreign direct investment.
Barnett also advised African leaders to refrain from subsidising the minerals industry, warning that it could be detrimental to the countries’ economies.
“There have been some subsidiary arrangements over the years in Western Australia, and it’s not the way to go. Emerging African economies should resist that, and often international companies will put pressure on small countries to provide concessions and subsidise arrangements, and those countries are not in a position to do that, or should they do that,” he said.
The premier recommended implementation of a stable and predictable taxation structure to ensure resource companies were attracted to the region, while the host country could retain a fair return for its resources.
“They should resist profit taxes and the like, and make sure that an easily-administered royalty is in place to make sure that all minerals extracted are paid for.
“And not to overcharge, but to set a fair charge that retains investment, but allows the nations to have an income to deal with the social and infrastructure issues in that country.”
Barnett is set to welcome members of the Common Market for Eastern and Southern Africa (Comesa) trading bloc, to which Zimbabwe is a member, to cement ties established in January this year when he signed a memorandum of understanding (MoU) between Western Australia and Comesa.
He said the MoU was aimed at providing economic opportunities for Western Australia and the Comesa nations through the sharing of knowledge and technology in the resources and agriculture fields.
“Under the MoU, Western Australia and Comesa will also seek to collaborate closely on training and capacity building across resources and agriculture,” he said.
The annual conference began yesterday and is set to end tomorrow. Australia’s Paydirt has been hosting the Africa Down Under Conference over the past 10 years, drawing delegates that include government officials, business leaders and mining executives from different African countries.
The positive, changing face of the African continent is continuing to attract the lion’s share of global exploration dollars as prospectors zoom in on its untold mineral riches.
Countries that were previously considered no-go areas have attracted a new wave of international investors, explorers and miners wanting to have another look.
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