Leveraging mining for accelerated development

Since African countries began gaining independence, the world has spoken of the African resource curse—the phenomenon of nations that struggle economically despite being rich in natural resources.¹ Studies show that African countries with natural resources experience challenges that include diminished health,² lower levels of education,³ and democratic challenges.⁴ However, the existence of natural resources itself is not a curse. Botswana is one nation that has seemingly overcome the resource curse through careful and strategic resource management, allowing its government to create regulations and tax mining companies to efficiently reallocate resources to development needs.

Botswana’s discovery of diamonds in 1967 resulted in the government implementing sustainable mining regulations within two years.⁵ The Botswanan mining sector stands as a unique socioeconomic development model, showcasing its ability to convert natural resources into avenues for growth, diversification, and prosperity. This has been achieved through the creation of a legal framework that outlines inclusive resource exploitation by vesting ownership of minerals through governmental partnerships.

This results in substantial rents that have been reinvested to address the nation’s development needs.⁶ Government partnerships with mining companies such as Debswana—a 50-50 partnership with De Beers—allows for mining profits to go directly to the government to be redistributed to Botswana’s citizens through government programs and the investment in public goods.⁷

Looking to the future, Botswana’s established expertise in resource contract negotiations and natural resource management sets it as a key player in critical mineral mining. These materials are indispensable for renewable energy technologies, electric vehicles, and other components of the green economy. The renaissance of industrial policy offers a unique opportunity not only for raw material mining but for value chain development and beneficiation within the mineral sector and through the implementation of the Africa Continental Free Trade Area.⁸

Vision 2063 and critical minerals leadership

As Africa advances towards the African Union’s Vision 2063 goals of achieving inclusive and sustainable development, the mining sector must evolve to include a robust focus on the continent’s abundant endowment of critical minerals needed for the global transition to a green economy. To prepare for the changing economy, we all need to invest in the development of new technologies and the human capital needed to deploy them. We should work together to find ways to regulate the industry to provide the safest and most profitable approach to critical mineral mining that advances all African economies. A few key areas to focus on are as follows.

1. Good governance and transparency: Studies show that countries who are unable to improve their economic well-being despite significant natural resources often suffer from high levels of corruption.⁹ Creating mining regulations through an inclusive process that includes a method for transparent monitoring of mining activities is the best way to ensure citizen safety while promoting development.
2. Reinvestment of resource rents: Mining should be appropriately taxed by local and national governments so that citizens across the country can benefit indirectly from these economic initiatives through government programming and long-term development projects.¹⁰ In addition to using these funds for development needs, establishing sovereign wealth funds can provide the much-needed service of stabilizing economies against commodity price fluctuations that can severely hamper economic growth. By reinvesting rents in ways that diversify economies, countries can reduce dependency on mineral exports and build resilience.
3. Development of a continental critical materials strategy: Given the enormity of the industry and the increasing global need for critical minerals, it would be in Africa’s best interest to develop a continent-wide strategy toward their management.¹¹ A focus on value-addition through processing and manufacturing these minerals locally would greatly benefit African economies.
4. Community engagement and benefit-sharing: Inclusivity is key to a strong sustainable mining strategy. Communities directly affected by mining should have a voice in, and receive direct benefits from, the process. Benefit-sharing mechanisms have been shown to be effective in the development of local communities. Inclusive decisionmaking also helps minimize conflict between the community and the mining companies while holding the latter accountable to agreed-upon sustainable mining practices.¹²
5. Promotion of sustainable and ethical mining practices: Africa disproportionately shares the burdens of climate change despite their minimal contributions to the issue.¹³ Mining practices should not add to these challenges. Minimizing environmental degradation through government regulation should be a goal of all mining endeavors for the health and safety of Africa’s citizens.¹⁴
6. Investment in research and innovation: Research and innovation regarding mining technologies must focus on the needs of African nations.16 Partnerships with local, regional, and global research institutions can help create mining techniques that eliminate common environmental concerns and minimize community impact.¹⁵
7. Strengthening regional cooperation: Regional cooperation toward the strategies discussed above is essential to facilitate knowledge-sharing, technology and infrastructure development, and best practices in mineral governance. In this way, all African nations can overcome the resource curse.

Africa has the opportunity to leverage its natural resources to create prosperity, reduce inequality, and enhance their negotiating power on the global stage. However, to do so successfully requires a reimagining of the current state of critical resource management that focuses on collective adherence to best practices for a sustainable future. Working from exemplars such as Botswana, together, we can achieve this goal.