Southern African countries will need greater policy coordination to turn their critical mineral wealth into regional processing and manufacturing industries, Parliament’s Portfolio Committee on Industry and Commerce chairperson Clemence Chiduwa has said, Mining Zimbabwe can report.
By Ryan Chigoche
Chiduwa said differences in tariffs, royalties and employment policies could undermine efforts to establish cross-border mineral value chains, particularly as SADC countries seek to move beyond exporting raw minerals.
Speaking at a recent meeting on critical minerals and regional industrialisation, Chiduwa said countries would need to align their policies if they are to develop a functioning regional industrial framework.
“For us to achieve that, I think there is need for us to look at issues to do with the policy commitments,” he said.
He was responding to a presentation by Farai Mutondoro of the African Institute of Environmental Law (AEIL), which proposed a hub-and-spoke model in which SADC countries build on their respective strengths in minerals, infrastructure, skills and investment capacity.
Under the model, countries would specialise in different stages of processing and manufacturing instead of each attempting to establish an entire mineral value chain.
Chiduwa said trade policy would be particularly important in determining whether such a model can work.
“If you look at SADC, just now as you speak, Zambia has imposed a 30% tariff on iron and steel products that are coming from SADC. Tanzania also has imposed the same tariff regime. Zimbabwe has imposed the same tariff regime. And South Africa has also imposed the same tariff regime,” Chiduwa said.
The specific tariff measures cited by Chiduwa would need to be verified against the respective countries’ current trade regimes, but his broader argument was that divergent national policies could make it difficult to establish integrated regional industries.
“Without convergence in terms of policy, this is going to be a challenge for us to come up with a compact,” he said.
Chiduwa said the same principle should extend to royalties and employment policies as the region seeks to build industries around critical and strategic minerals.
The AEIL presentation highlighted the opportunity for African countries to capture more value from minerals including lithium, copper, cobalt and graphite, rather than continuing to export largely unprocessed resources.
Africa holds significant deposits of several minerals considered critical to the global energy transition, but much of the processing and manufacturing associated with those resources takes place outside the continent.
The presentation cited Morocco’s phosphate industry as an example of how downstream investment can allow a mineral-producing country to move beyond raw exports into higher-value products such as phosphoric acid and fertilisers.
The proposed hub-and-spoke model seeks to apply a similar approach at regional level, with countries leveraging their different mineral endowments and industrial capabilities.
For Zimbabwe, the approach comes as the country seeks to expand beneficiation of lithium, platinum group metals, chrome and other strategic minerals.
Regional integration could allow countries to combine their resources, infrastructure and technical capabilities while creating a larger market for processed mineral products.
But Chiduwa said the success of such an industrialisation drive would ultimately depend on whether countries can align the policies governing trade and investment.
The push for greater value addition is therefore placing policy convergence alongside mineral resources, infrastructure and investment as key components of SADC’s ambitions to build regional mineral industries.
