While gold mining in Ghana has been rejuvenated since the 1990s, West Africa’s vast mineral reserves should be attracting much greater investment and will play a vital role in the region’s growth and development post-Covid, say mining law experts Beech Veltman Inc (BVI).
“With its abundance of untapped mineral resources, the stability of the Economic Community of West African States (ECOWAS), and the common policy and legislative frameworks in the region which contribute to investor confidence, there should have been substantially more investment, particularly in countries other than Ghana, Mali and Burkina Faso,” said Warren Beech, a co-founder of specialist mining law firm BVI, who spent the previous decade as head of mining and infrastructure practices at large South African and international law firms.
Given gold’s “safe haven” status and the vast deposits, relatively accessible geology, and cost-effective extraction in several West African nations, Beech says it’s logical that gold mining is the current focus, but the region offers a diverse array of untapped mineral wealth.
“West Africa is also endowed with diamonds, bauxite, manganese and oil, with some deposits of uranium, platinum, lead, manganese, nickel, tantalite, zinc, copper, cobalt and iron,” noted Mbuyi Katumba. “Most of these minerals are critical as the world transitions to the ‘green economy’.”
It is very unfortunate, say Beech and Katumba, that challenges such as illegal mining, regional security concerns, and Covid-19 have overshadowed the significant potential of the mineral wealth of the region to contribute to growth and development – particularly given West Africa’s history of trying to make investment as easy as possible.
BVI believes that for West Africa to attract the investment that is vital to unlock its vast mineral resources, it will need to build on its current platform by addressing – on a regional basis – the very real concerns about security, as well as regularising small scale and artisanal mining so such miners can work alongside mining companies making substantial investment.
The 15 member states of ECOWAS will need to continue relying on the cooperative, regional approach that has resulted in substantial benefits to citizens, said Beech. “Communities that support their government and buy into benefits that flow from mining, are more likely to assist with the implementation of programmes aimed at addressing the various challenges. Communities working together play a vital role.”
The relative regional stability ECOWAS has provided will likely be bolstered by streamlined trade that began last year under the African Continental Free Trade Area (AfCFTA).
“While it is too soon to tell whether AfCFTA is successful, there is a lot of positivity around its implementation and the potential positive consequences, including attracting investment, increasing jobs, alleviating poverty, and creating additional revenue streams,” commented Beech.
Given that solid foundation, and the availability of large, untapped mineral resources coupled with the low cost of extraction, Beech and Katumba believe West Africa is likely to be a very attractive investment destination in the post-Covid-19 world.
“If member states can address the primary concerns surrounding regional security, this will facilitate even better investment,” Beech said. “The usual challenges faced by mining jurisdictions such as infrastructure development and accessibility to semi-skilled and skilled workers, can be addressed relatively easily with the flow of investment.”
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