Africa and Chile eye mutually beneficial South-South cooperation
27-06-2017 08:32:00 | by: Bob Koigi | hits: 1738 | Tags:

There are benefits that mineral-endowed countries in Africa could accrue from intensifying their cooperation with Chile, the world’s biggest copper producer and a country.

This, according to acting Executive Secretary of the Economic Commission for Africa Abdalla Hamdok who was speaking at the opening of the roundtable “Mining for Development – leveraging the Chilean Experience for Africa” at the United Nations Conference Center in Addis Ababa, Ethiopia.

“Africa has suffered from the dependency to one commodity, which has made the continent vulnerable to external shock, despite the recent commodity boom,” he said in his opening remarks. “It would be beneficial for instance to learn from Chile how it has brought value add to its minerals sector despite it also being a commodity-dependent country.”

Echoing Mr. Hamdok was John Peter Amewu, Ghana’ s Natural Resources, Land and Forestry Minister who said that Ghana and Africa had significant potential for mineral discoveries and that the concern for both remained how to make mineral exploitation a catalyst for structural transformation and economic growth.

Africa, he said, faced the challenges of inadequate local supply programs, which could make mineral-rich countries benefit from linkages in the mineral value chain, and the tackling of Artisanal and Small-Scale Mining – a challenge successfully taken on by Chile. “It is my belief that we are ready to learn from Chile,” he said.

In his presentation, Kojo Busia, Coordinator or of the African Mineral Development Center underlined that it was important to learn from Chili in the context of the African Union (AU)’s African Mining Vision (AMV), which was adopted in 2009 by AU’s member states with the aim to shift from rent maximization to harnessing mineral resources for inclusive and sustainable development.

“It is crucial that Africa focuses on institutional transformation – adopting the right institutional framework and applying the right strategies – if it is to bring value in its mineral sector upstream (input into mining operations) and downstream through beneficiation,” he said. 

There followed a presentation on how Chile has formalized small scale miners through the forming of ENAMI, a government arm, which provides loans to small scale producers – including artisanal miners to explore and identify new ore reserves, develop and enhance their mining facilities, buy equipment and reach adequate levels of working capital.

Chile, which accounts for 30% of the global supply of copper has adopted open economic policies in the 1970s and this has translated in the building of a vibrant mining sector characterized by the coexistence of a national mining utility – COCHILCO – and a multitude of foreign private operators.

The country has also been able to develop other high-income sectors in parallel with its commodity-based economy through the implementation liberal trade and investment policies.

However, Chile and African countries alike are still facing past and persisting challenges, ranging from energy issues – low availability and high costs of energy, infrastructure access and deficits to continuing dependence on one commodity for their foreign exchange earnings.

Participants to the roundtable were invited to look at ways to assist Africa and Chile in diversifying their respective economy and bring value add to their mineral sectors. “We are interested in sharing experiences that would help Africa achieve the goals of its AMV. We hope this is the beginning of a long standing, beneficial cooperation,” said Mr. Jaime Chomali, Chile’s Ambassador to Ethiopia.