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Will the changes in policy on strategic minerals be the key to Namibia and Zimbabwe’s economic renaissance?

African resources have always been positioned to be global-facing, to benefit external actors rather than their own nations

The Inaugural London Indaba that took place on 26 June 2023 under the theme “investing in resources and mining in Africa” sparked an intensive debate about Namibia and Zimbabwe’s recent moves to ban the export of raw strategic minerals. The debate is motivated by the bans contention with the World Trade Organisation’s regulations that condemn resource nationalisation. However, a more important question is whether these bans can be beneficial to resource-rich African countries in an era where energy transition minerals are viewed as having existential value.

Last year, Zimbabwe moved to ban raw lithium exports after reporting a 1.8 billion euro loss from exporting the mineral as an ore rather than seeking steps to add value and process it into batteries. In a similar move, the Namibian government announced that it has banned the export of unprocessed critical minerals, such as crushed lithium ore, cobalt, and rare-earth metals and elements like dysprosium and terbium in early June of this year.

Both countries were losing out on the economic opportunity presented through the processing of these minerals. Lithium, in particular, is currently in high demand. Recognized as an ‘energy transition mineral’, lithium is critical in the creation of long-lasting and high-performance batteries. Lithium-ion batteries also provide the solution to maximising the use of wind and solar energy as they are renowned for their ability to store high quantities of energy for grid-scale use and the versatility of their applications. In the case of Namibia, rare earth elements are also essential for permanent magnets that are vital for wind turbines and electric vehicle motors. The shift to greener and cleaner energy systems has caused a huge increase in the demand for these minerals.

To beneficiate or not to beneficiate

The alarming truth is that African resources have always been positioned to be global-facing, to benefit external actors rather than their own nations. That is why phenomena like the resource curse have been widely explored, leading to the dubious conclusion that our resources harm us more than they benefit us. It goes without saying that this conclusion often rests on reductionist analyses, with most overlooking the many global capitalist undercurrents that sour the economic trajectory of resource-rich African nations like the DRC.

Beneficiation is one of the policies that seek to invert the outward-facing gaze by ensuring that African countries can benefit more from their resources. Beneficiation is a value-adding process that treats raw mineral ore by removing gangue minerals to produce refined mineral ones with a higher export sales value. It is a strategy that translates a nation’s mineral resource endowment into a national competitive advantage rather than a curse. The African Union’s Africa Mining Vision (AMV) has identified beneficiation as a key mechanism for enabling Africa to benefit more from its resources.

The concern around Namibia and Zimbabwe’s move toward beneficiation is rooted in the founding principles of the World Trade Organisation (WTO). Beneficiation has been opposed in other instances by the WTO panel as being inconsistent with the WTO General Agreement on Tariffs and Trade (GATT). The agreement under Article XI:2(a) only promotes the banning of exports when they are related to a critical shortage. It is argued that the Zimbabwe and Namibia bans have not been made in response to a shortage that can be detrimental to them, but rather implemented to nationalise strategic minerals. It goes without saying that such arguments make little sense in a context where powerful nations disregard WTO rules when its suits their interests even as they ensure that exporters of raw minerals, such as Namibia and Zimbabwe, remain at the bottom of the value chain.

It is also argued that these regulations are detrimental in the energy transition era, and that all mechanisms, and by extension resources, that can aid the green transition and common battle against the climate crisis require global custodianship. The logic follows that if minerals like lithium, dysprosium, and terbium can aid decarbonisation, then the creation of any restrictive mechanisms that prevent their global distribution should be contested. But such arguments do not stand closer scrutiny.

For one thing, beneficiation does not translate into an outright ban on mineral exports. Nor does it resist the transition. In fact, an outright ban defeats its very purpose of improving national revenue. Namibia and Zimbabwe’s move just improves the nations’ position as critical parties in the green transition while availing the necessary resources to catalyse economic growth and industrialisation.  Further, leading green industrialisation can move Africa from the periphery to the centre of the global green economy, allowing the continent to develop a framework for what sustainable growth can look like.

If the liberation-movement governments of Namibia and Zimbabwe can overlook their penchant for neo-patrimonialism and patronage, beneficiation policies can be an important step towards the attainment of sovereign economic development. Especially in the developing world where minerals have been flagrantly exported at their most minimal value, beneficiation policies incentivize the development of technical capacity for mineral processing. For Namibia and Zimbabwe, the challenge is to stay the course with this decision and then use the proceeds from beneficiation to deliver the much-needed economic transformation that their commendable moves promise.

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