Within a few years of independence, African governments claimed sovereignty over their mineral and mineral resources. Before that, the resources were exploited by European mining companies. Since the 1990s, transnational corporations have again become the dominant force as owners and operators of large mining projects.
Ben Radley has researched economic transformation in central Africa, with a particular focus on resource-based industrialization. He argues in this excerpt from his new book, Disrupted Development in Congo: The Fragile Foundations of the African Mining Consensus, that the return of supranationals took place through a three-stage process that began with a misreading of African economic stagnation from the mid-1970s onwards. The cession of resource sovereignty was made possible by the pathology of the African state and the demonization of African miners.
Stage one: Blame the African state
In the Democratic Republic of the Congo (DRC), President Joseph-Désiré Mobutu took early steps to bring resources under state control. The Bakajika Law in June 1966 it required all foreign-based companies to locate their headquarters in the DRC, then known as Zaire, by the end of the year. In addition, the largest Belgian-owned colonial mining subsidiary, Union minière de Haut Katanga, was nationalized in the same year. It became Société générale Congolaise des minerais (Gécamines). By 1970, the Congolese public sector controlled 40% of national value added.
Nationalization had no immediate negative effect. In the PRC copper production rose steadily between 1960 and 1974 from about 300,000 tons to 500,000 tons. It increased over the same period from 500,000 tonnes to 700,000 tonnes in Zambia.
In the DRC, government revenue tripled from US$190 million in 1967 to US$630 million in 1970. A national health system was established with 500,000 employees. It was considered a model for primary health care in the global south. The country also achieved 92% enrollment in primary education and increased access to secondary and tertiary education.
But soon after, the price of oil started to rise. Commodity prices fell due to the recession in the global north. In the DRC and Zambia, the price of copper fell from US$1.40 per pound in April 1974 to US$0.53 per pound in early 1975 and remained stagnant thereafter. Over roughly the same period, from 1973 to 1977, the cost of oil imports quadrupled. Additionally, as African government loan repayments became due, interest rates on loans began to rise as the United States attempted to control inflation through monetary policy.
Mining production levels have stagnated or declined. Growth slowed and debt rose across the continent. Between 1980 and 1988, 25 African countries restructured their debts 105 times. In the PRC, exports of copper and cobalt declined sharply, eventually collapsing in the early 1990s.
Of course, external shocks were not the only cause of the upheaval. The nationalization measures undertaken in 1973 and 1974 were poorly designed and implemented and went badly. Agriculture had been neglected, receiving less than 1% of government spending from 1968 to 1972, and Congo’s manufacturing sector was in decline.
However, consideration of the impact of external shocks, alongside recognition of the progress made by newly independent African governments in the short time to this juncture, has been largely missing from influential analyses of the 1980s seeking to understand the causes of African economic stagnation from the mid-1970s onwards.
Instead, misguided African state intervention and government corruption were suggested as primary causal explanations, to the exclusion of other factors.
Stage Two: Liberalization and Privatization
Between 1980 and 2021, the World Bank provided US$1.1 billion in mining grants and loans to 15 of the continent’s 17 mineral-rich and also low-income countries. This gave the bank considerable scope for its implementation strategic vision on how mining is organized and managed:
The private sector must take the lead. Private investors should own and operate mines. Existing state-owned mining companies should be privatized as soon as possible
With the revision of the regulatory framework, foreign investment was freed up to seek new opportunities. Mining exploration in Africa increased from 4% of total global mineral exploration expenditure in 1991 to 17.5% in 1998. Total mining investment in Africa doubled between 1990 and 1997.
The start of a surge in commodity prices in 1999 provided new impetus. In 2004, the $15 billion invested in mining in Africa represented 15% of all mining investment worldwide, up from 5% in the mid-1980s. From 2002 to 2012, a period covering most of the supercycle , spending on mineral exploration in Africa increased by more than 700%, reaching US$3.1 billion in 2012.
The dramatic increase in foreign direct investment growth since the 1990s has changed the composition of these economies, which are increasingly dependent on foreign direct investment as a source of development finance. This level of dependence is greater today than in other country groups and regions.
The basic logic of the World Bank’s strategy for African mining still holds. In 2021, the lender had ongoing mining reform programs in seven African countries ranging from Niger ($100 million) at Central African Republic ($10 million). Each program was geared toward institutional and regulatory change within an overall framework that gives overall priority to capital-intensive, foreign-owned mining.
Stage three: Criminalization of African miners
There was one final hurdle for multinational mining companies. Some deposits were already occupied by labor-intensive miners. They mined mainly gold and diamonds. But they were also involved in the production of silver, copper, cobalt, tin, tantalum, iron ore, aluminum, tungsten, wolframite, phosphates, precious and semi-precious stones, and rare earth minerals.
Globally, labour-intensive mining contributes up to 30% of total cobalt production, 25% for tin, tantalum and diamonds, 20% for gold and 80% for sapphires.
African labour-intensive mining directly employs millions of workers across the continent. It has increased significantly since the 1980s due to several factors. These include rising commodity prices, especially during the boom cycle of 1999–2012, which boosted mining wages and profits.
Despite the sector’s importance to rural employment, African miners are commonly characterized by the World Bank, African governments and parts of the scientific literature as ‘primitive’, ‘basic’, ‘inefficient’, ‘rudimentary’ and ‘unproductive’.
In 2017, 70,000 miners were displaced by the Ugandan army and police to make way for a Canadian-listed mining company. Speaking about displacement, a Ugandan government official he said:
These people (Miners) who are still joking, they should have style. Now, I am not only the director (in the Ministry) but also the commander of the Mineral Protection Unit of the Uganda Police Force. So, these illegal miners who are still behaving like those in Mubende (who were evicted), should pack up and vacate the mines, otherwise, my police will help them pack.
This statement speaks well of the general respect held for African miners in the (re)industrialization process of capital-intensive, foreign-owned mining. African miners forcibly displaced and removed from the best deposits are restricted to work in less productive areas.
The final act?
Recent mining code and policy reviews led by African governments such as Tanzania, the DRC, Sierra Leone and Malawi have begun to push back against this rule. They draw inspiration from the vision for mining Africa, a framework developed by the African Union in 2009 to deepen the links between foreign-owned mining and national economies. The vision also seeks to strengthen the government’s ability to negotiate and secure development benefits from foreign mining companies.
But these do not pose a fundamental challenge to the continent’s dominant model of capital-intensive, foreign-owned mining industrialization. They remain a long way from the earlier period of the 1960s and 1970s of African resource dominance.
A bigger version of this excerpt was originally published in the Review of African Political Economy (ROAPE).