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Mining Indaba '17: Export restrictions not the answer, says OECD

By IM Staff
Published: Friday, 10 February 2017

Export restriction policies by producer countries are not the way forward for African nations to benefit from the resources they host.

Cape Town morning_Wendy, via Flickr 
Indaba was held in Cape Town on 6-9 February, bringing together metals and minerals companies from all over the world. (Picture credit: Wendy, via Flickr)


Implementing export restrictions on natural resources is a "sub-optimal" way to improve the returns on a country's natural resources, Jane Korinek, economist and trade policy analyst at the Organisation of Economic Cooperation and Development (OECD) told delegates at the Investing in African Mining Indaba 2017, held in Cape Town, South Africa at the start of February.

Citing a past study undertaken by the University of North Western together with the OECD focussing on countries that put in place restrictions aimed at curbing exports so that beneficiation can take place domestically and/or boost local employment such restrictions have shown little advantage, Korinek said in Cape Town on 8 February.

 Indaba2017_Anglo_American_Cutifani
Anglo American's Cutifani tells delegates mining companies need to change their rhetoric when approaching host countries.
Investors must be able to export the minerals that they’re extracting, she added.


Korinek’s comments came as ministers from most African nations sought to reassure delegates regarding the prospects for investing in their respective countries.

Republic of Cameroon minister of mines, industry and technological development Ernest Gbwaboubou, for example, said that there is "clear political will to change all the practices that have hindered mining" within Cameroon in the past. 

The topic was a constant theme throughout the conference as investors sought to find the best place to put their money, while juniors and producers sought to emphasise the need for a good relationship with the country in which they operate.

Rio Tinto’s chief executive of energy and minerals, Bold Baatar, told delegates during the opening session on 6 February that it is "critical" that mining companies are able to operate in jurisdictions that provide stability.

In the next five to ten years companies can transform how they do business with their local hosts, according to Anglo American chief executive Mark Cutifani, who told delegates that mining companies need to change their rhetoric in how they approach operating in host countries.

 Indaba2017_RioTinto_Bold_Baatar
 Rio Tinto's Baatar noted the importance of a stable operating environment.
Every conversation should start with "how can we help you improve your country?" rather than the old approach previously taken by miners that looked to go into a country and primarily extract benefit.


With amendments to South Africa’s Mining Charter, the country’s mining legislation, due to be concluded by June 2017, the next three-to-four months will be critical, Cutifani added.

Indeed, with government representation high at Mining Indaba – ministers from Mali in the north-west, the Democratic Republic of Congo in the center and Namibia in the south were all in attendance – the importance of the link between African nations and their foreign investors was implicit.

Balanced and stable regulation is the key to all parties profiting, Korinek said

Better regulation, rather than restrictive regulation, will bring benefit to locals as well as investors , Korinek advised.

Anglo’s Cutifani sought to push a new way forward, emphasising the need to do things differently as well as the requirement to put the past behind by quoting L.P. Hartley’s The Go-Between novel and film: "The past is a foreign country, they do things differently there."



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