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30/05/2024
Mining News

Unlocking Africa’s responsible mining potential through the CRM Act

In his opening address to the Berlin Energy Transition Dialogue (BETD) in March 2023, Kenyan President William Ruto highlighted the potential of a strengthened partnership between Africa and Europe:

Africa could become Europe’s most important partner for the development of the energy transition, provided the right kinds of investments are made at a sufficient scale.”

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Forging new strategic partnerships with third countries will be integral to achieving the goals set out in the Critical Raw Materials Act (CRMA), through which the European Union aims to diversify its critical mineral sources by reducing dependencies on mineral or metal from single-state economies to 65 percent.

The EU has already taken significant strides towards this goal by establishing partnerships with Canada, Ukraine, Namibia, Argentina and Kazakhstan, and more are in progress.

Bernd Schäfer, CEO, Managing Director, EIT RawMaterials, a founding partner of AfricaMaVal says: “Africa is rich in mineral supply and is experiencing a mining boom – some of our European partners are contributing to this too.  This provides the European Union with rich ground to exchange ESG practices and technology advancements and skills that will also create local added value, quality employment, the development of local industrialization, thereby increasing the competitiveness of the African economy.”

There is a growing awareness among European politicians of the importance of creating strategic partnerships with African countries. In her opening address to the Berlin Energy Transition Dialogue in March 2023, German Foreign Minister Baerbock noted:

“We can’t do magic on European soil. Thus, international partnerships at high level are needed, meaning that everyone should profit, especially the countries where the resources come from.”

EU investment plans for mining companies in Africa.

The momentum of the green energy transition and the turmoil resulting from the Ukraine war have further fueled investor interest in Africa. In 2022, exploration budgets dedicated to Africa saw consistent growth, maintaining a 10 percent share of the global world exploration budget. The EU is encouraging more investment into mining in Africa, by classifying extraction and processing as sustainable activities under the EU taxonomy.

More is welcome, as demonstrated by recent instances of credit enhancement by member states, showcasing their capacity to utilise public funding to bolster CRM value chains. Moreover, the European Investment Bank group and European development finance institutions can also provide support for CRM value chains between the EU and Africa.

AfricaMaVal at the forefront of responsible sourcing of minerals in Africa

Africa has much to offer in the rush for raw materials; the continent has over 30 percent of the world’s global mineral reserves, and, in 2021, Africa was the world’s top producer of rhodium, platinum, cobalt, and palladium. There is still huge potential for further exploration, and strengthening ties with Europe will ensure that this is done in line with ESG objectives.

“This is a chance for the EU to create long-term partnerships with African countries which help their society. The partners of AfricaMaVal will support the development of EU-Africa partnerships for the responsible sourcing of minerals while ensuring co-development processes in the best environmental, social, and governance conditions and a long-term prolific business environment for European and African companies,” says Jean-Claude Guillaneau, coordinator of the AfricaMaVal project.

The EU is well-positioned to support and advance existing sustainability practices in African countries. AfricaMaVal welcomes the CRM Act, to support the development of a sustainable Europe-Africa supply chain in critical raw materials sourcing. The EU has included Africa in the Global Gateway, with the Europe Investment Package, which aims to assist Africa for a strong, inclusive, green and digital recovery and transformation.

The Investment Package will be delivered through Team Europe initiatives: the EU, its Member States, and European financial institutions will work together to support concrete and transformational projects jointly identified in priority areas.

 

Source: Africa MaVal

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