Business
Who Exploits Industrial Metals in Sub-Saharan Africa?
While colonialism has been ousted from Africa, many argue that multi-national corporations based in far-off capitals practice economic colonialism with developed nations using economic power and technical capability to exploit the resources of sub-Saharan Africa while paying a pittance to local populations.
In part one of the series, we examined the two largest oil- and -gas-producing countries in sub-Saharan Africa — Nigeria and Angola — and who profits from the riches that lie beneath the soil. In this segment we will examine sub-Saharan Africa’s largest producers of industrial metals iron ore and copper: South Africa and Zambia, respectively.
South Africa
In contrast to many mineral-producing states, South Africa is an exceptionally diverse economy with many successful industries other than mining. While the country ranks among the world’s largest producers of iron ore, it also has extremely prominent financial, legal, energy and transport sectors.
The country is the seventh-largest iron ore producer in the world, and the fourth-largest exporter. Yet all its mineral exports — including 72 percent of the world’s platinum, 59 percent of its kyanite and many other significant minerals — only contribute 8.8 percent to the South African economy.
Increased demand seems inevitable due to China’s predicted super cycle or a prolonged (decades-or-more) trend in the rise of real commodity prices driven by urbanization and industrialization of a major economy. The super cycle, combined with a mining ban in Goa, India — traditionally responsible for about half of India’s mining — present very good news for the South African mining industry.
Ownership in companies that export iron ore is increasingly diverse due to South Africa’s indigenization or black economic empowerment policies, aimed at increasing black ownership of mining companies to 26 percent by 2014.
By far the largest iron ore-extracting company in South Africa is Kumba Iron Ore Ltd. In 2011, the most recent year for which complete data is available, Kumba was responsible for 41.4 megatons of the country’s 58.1-megaton total iron ore production. Of this production, 38.9 megatons came solely from the Sishen Mine, by far the largest in the country.
