Transparency and dialogue are key factors in attracting
investment in Africas mining sector, African countries
representatives and mining companies said today at the Mining
on Top: Africa London Summit.
Meanwhile, companies urged for more
transparency in the governments to eradicate corruption
within the mining sector.
Kevin Fox, managing director of exploration for
Africa, Europe and Asia at Rio Tinto, said that there are a
range of challenges related to corruption in African
We have an internal business ethics, according to
which we do not seek compromises [in presence of bribery acts]
and avoid corruption, Fox said during the event.
Rio Tinto operates the
Richard Bay Minerals project, which mines titanium and
zircon from its mineral sand deposits in KwaZulu-Natal
province, South Africa.
The Anglo-Australian group also owns 80% of
QIT Madagascar Minerals (QMM) mineral sands mining
operation, with 20% owned by the government of Madagascar.
However, attempts of corruption from local governments can
bring long delays in obtaining social licences and mining
permits, which ultimately affected the feasibility of mining
projects in terms of costs, Fox explained.
Rio Tinto said that corruption is a major factor in the
companys decision to abandon jurisdictions where lack of
transparency determines long delays and high costs in projects
In 2006 the African Bank Group endorsed the Extractive
Industries Transparency Initiative (EITI), in line with the UK
Bribery Act, to push African countries to adopt greater
transparency and better governance in the mining sector.
Ghana, Zambia, Mali and Tanzania are among those which took
part in the initiative, but whether this and other initiatives
are effective in eradicating corruption in the African mining
sector is tricky to say, Fox said.
The Minister of Land and Natural Resources of Ghana (Alhaji
Inusah Fuseini) said that companies should operate in a
transparent way within Africa, both in the way they define
project objectives and in setting tariffs.
Fuseini added that governments should also operate in a
transparent way, specifically underlying the
Ghana does not think it is getting the best from
mining investments in the country. These should do more to
create shared values and sustainable business, Fuseini
said at the summit.
The Minister of Land and Natural Resources said that many
companies which invest in the country are only interested in
examining and proving resources, to acquire asset values,
without developing the projects.
We dont want to create situations where mining
companies walk away, but we can negotiate on taxes and
royalties, Fuseini said.
Constructing a dialogue
Richard Morgan, international government relations advisor
at Anglo American, said during the event that, in order to
attract investors in the sector, both governments and mining
companies should keep an open dialogue and look at the bigger
picture where projects are concerned.
It is important for mining companies to get involved
with local communities, to build infrastructure, hospitals,
water pumping, and deliver transferable skills in the country
in which they operate, Morgan said.
James Hopkinson, director of UK-based risk management
company, Assaye Risk, said that companies need to understand
both natural and social environment of the region where they
develop their assets, in order to receive social and local
support to their projects.
It takes a long-term approach to build up this
support, but it is absolutely vital to obtain social licences,
which are a key component to take the projects into
operation, Hopkinson said.
Hon. Musa Mohammed Sada, Nigerias Minister of Mines
and Steel Development, said that the African country expects
companies to form good partnerships and look for reciprocal
understanding with investors.
Too strong and tight regulations [in the mining
sector] are not useful as you end up regulating nothing,