Durban, South Africa

21-22 November 1997

A. Attendance and organization of work

1. The second Regional Conference of African Ministers responsible for the development and utilization of mineral and energy resources was held in Durban, South Africa from 21 to 22 November 1997. The meeting was formally opened by Hon. Thabo Mbeki, Deputy President of the Republic of South Africa. Statements were made by Dr. K. Y. Amoako, Executive Secretary of the United Nations Economic Commission for Africa (ECA), Mr. Bobby Godsell, President of the Chamber of Mines of South Africa on behalf of the South African minerals private sector and Ms. Nthobi Moahloli of Engen Petroleum Ltd., on behalf of the South African energy private sector. Mr. F. Ohene-Kena, Minister of Mines and Energy of Ghana, outgoing Chairman of the first conference, also made a statement.

2. The meeting was attended by the following 34 member States of the Commission: Algeria, Angola, Benin, Botswana, Burkina Faso, Burundi, Central African Republic, Democratic Republic of Congo, Cote d'Ivoire, Egypt, Equatorial Guinea, Gabon, Ghana, Guinea, Kenya, Lesotho, Malawi, Mali, Mauritania, Morocco, Mozambique, Namibia, the Niger, Nigeria, Rwanda, Senegal, South Africa, Swaziland, Seychelles, Sudan, Uganda, United Republic of Tanzania, Zambia and Zimbabwe.

3. Observers representing international organizations, African inter-governmental institutions, energy and minerals development institutions, professional associations, non-governmental organizations (NGOs) and the private sector were present from the following institutions: Authority for the integrated development of the Liptako-Gourma region (ALG); African Development Bank (ADB); Economic Community of West African States (ECOWAS); Common Market for Eastern and Southern Africa (COMESA); World Energy Council (WEC); Department for Economic and Social Affairs of the United Nations (DESDNRM); Organization of African Unity (OAU); Southern African Development Community (SADC); United Nations Industrial Development Organization (UNIDO); United Nations Environment Programme (UNEP); United Nations Conference on Trade and Development (UNCTAD); the West African Economic and Monetary Union (UEMOA); the Eastern and Southern African Mineral Resources Development Centre (ESAMRDC); the African Union of Electricity Producers and Distributors (UAPDE); Electricity Supply Commission of South Africa (ESKOM); the Chamber of Mines of South Africa; the Chamber of Mines of Ghana; the Chamber of Mines of Namibia; the Chamber of Mines of Zimbabwe; and the Groupement professionnel des mineurs du Burkina (GPMB).

4. The Conference unanimously elected the following countries to the Bureau:

5. The conference also appointed a drafting committee to prepare a declaration highlighting the major decisions of the Conference. The committee comprised Benin, Côte d'Ivoire, Nigeria and South Africa.

B. Agenda of the Conference

6. The Conference adopted the following agenda:

C. Account of proceedings

Opening addresses

7. On behalf of President Mandela and his Government, Hon.Thabo Mbeki, Deputy President of South Africa welcomed all the participants to the Conference and requested them to feel at home in Durban. He added that the Conference gave South Africa an opportunity to demonstrate its commitment to the development and utilization of mineral and energy resources for the economic and social emancipation of the African people.

8. The Deputy President continued that although the history and civilization of Africa was fraught with misconceptions and distortions, realities demonstrated that African civilization was rich and formed part and parcel of world history in which Africa's natural resources had played an important role.

9. After its long and tragic history, the continent had emancipated itself politically. The challenge now was what Africans should make of their rich natural resources during the twenty first century which was less than three years away. African people had to develop and utilize the resources now under their exclusive control and put the continent on the road to renewed prosperity and peace.

10. Hon. Mbeki regretted that despite decades of exploitation, vast amounts of resources still remained either unexplored, badly merchandized, unbeneficiated or their value completely lost. He cited the example of the Democratic Republic of Congo as a country possessing vast amounts of natural resources which could generate economic growth and development for the entire Central African subregion.

11. The Deputy President underscored the fact that in the era of globalization, Africans needed to work together in order to offset the negative effects of globalization whilst taking advantage of its positive effects. He reiterated the fact that intra-African trade and the development of regional institutional capacities were prerequisites for entering the new world order.

12. Hon. Mbeki stated that for Africa to emancipate itself from the periphery of human progress, there was need for special socio-economic remedies within the framework of the OAU, the UN and other international organizations to give developing countries an equitable voice in addressing global governance and economic progress. He said that as South Africa embarked on the task of the presidency of the non-aligned movement in 1998, the challenge would be to champion the struggle of development and give birth to a new international order. He challenged the conference to come up with concrete remedies to Africa's predicament and prove the prophets of doom wrong.

13. In conclusion, the Deputy President advocated for respect of human rights, inviolability of democracy and popular governments committed to the service of people as preconditions for Africa to be respected by the world. He thanked ECA and all the countries and organizations represented at the Conference for their efforts in making the event a success and declared the Conference open.

14. Mr. Amoako, UN Under-Secretary General and the Executive Secretary of ECA welcomed the delegates to the Conference and expressed his gratitude to the Government and people of South Africa for hosting the Conference. He thanked Hon. Thabo Mkeki for his instructive advice on the major issues facing the Conference. Mr. Amoako further thanked Mr. Maduna, the Minister of Minerals and Energy Affairs, and his team, for the untiring efforts to secure the success of the meeting. He requested that the minister conveys the profound gratitude of the Conference to President Nelson Mandela. Mr. Amoako also recognized the invaluable contribution of the Republic of Ghana, as outgoing Chairman, to the first session.

15. The Executive Secretary told the meeting that the role of mining and energy industries in Africa needed be viewed in the context of the challenges the continent faced. A major challenge was that of reducing poverty. This required strategies which targeted accelerated growth and rising per capita income. In this respect, Mr. Amoako observed that since 1995, more than half of the continent's nations had enjoyed growth rates in excess of those of population while the number with negative growth rates had dropped. In the area of mining, the downward trend in Africa's mineral production had been reversed while crude oil production had increased.

16. Mr. Amoako, reminded the meeting that economic growth alone without a broad distribution of wealth could not eradicate poverty. Both the mining and energy sectors could contribute to the spread of benefits particularly to the rural areas where 90 per cent of Africans lived. Although the mining and energy sectors were important contributors to foreign exchange earnings and fiscal revenue, the industries had remained concentrated in the hands of a few actors.

17. It was therefore pleasing to note that Africa's share of direct private investment in mining was growing rapidly as indicated by the opening of new mines, such as Sadiola Gold mine in Mali and Hartley Platinum mine in Zimbabwe. Ashanti Goldfields Ltd. had also acquired several mining companies.

18. Despite these successes, globalization and the emergence of regional economic groupings posed further challenges which required African Governments, through their subregional economic groupings, to forge a common strategic position. In mining there was a clear move towards regionalism through the geographical migration of companies such as those from South Africa. Similarly, protocols were being adopted in the energy sector to advance cooperation among the member States. These developments augured well for mitigating the effects of global competition.

19. Turning to privatization, the Executive Secretary observed that this posed further challenges. In the energy sector, the share of privately owned power assets was increasing. Similarly, a number of African countries had updated their mining codes to attract private sector investment. Despite these positive trends, difficulties of asset evaluation, labour redundancy and acceptance of a private sector monopoly hampered privatization efforts. Privatization and attracting foreign investment continued to be retarded by foreign exchange controls and inadequate legal and regulatory frameworks. Ideally, guarantees of security of the investor needed to be balanced against national interests.

20. The Executive Secretary outlined a further challenge as the development of Africa's capital markets. In this respect, he observed that by 1996, 13 countries had established stock exchanges.

21. In respect of the role of ECA, Mr. Amoako told the meeting that the Commission had been reformed to enhance focus, selectivity and leveraging of its resources on critical issues faced by the member States. Implementation of ECA's activities emphasized networking and strategic partnerships. The Executive Secretary gave an account of ECA's activities in this respect. In energy, a number of projects had been implemented including workshops on energy sector planning in collaboration with the World Bank. Similarly, projects in mineral resources had included thematic studies on copper and aluminum as well as various experts' meeting such as the one on privatization and deregulation.

22. In conclusion, the Executive Secretary underlined ECA's relevance to the intergovernmental machinery which was supported by the deployment of its intellectual resources in disseminating best practices to guide cooperation in the mining and energy sectors. Finally, Mr. Amoako expressed hope that the Conference would result in constructive dialogue between all stakeholders.

23. Mr. Bobby Godsell, President of the Chamber of Mines of South Africa, speaking on behalf of the South African minerals private sector, reflected on aspects of the transformation South Africa was undergoing. He added that the transformation was about society, politics and economics and was a consequence of the end of the period of racial exclusion and domination which had prevailed in South Africa in the past. It meant the redistribution of the country's wealth to benefit all people. In the mining sector, it also meant bringing together the talents of South African society in capital formation, exploration and development activities, and management processes.

24. Mr. Godsell stressed the importance of balancing large and small-scale mining companies and operations which was currently not the case in South Africa where large scale operations predominated. He further stressed the need to balance fairness and certainty with regard to taxation and pointed out that the South African mining safety Act did not contain safety standards although it dealt with risk management. He noted that South Africa enjoyed a well organized labour and that increments in wages should be linked to increased productivity.

26. He ended his statement by emphasising the importance of regional cooperation, especially with regard to the development of transboundary minerals deposits.

27. Speaking on behalf of the South African energy industry, Ms. Nthobi Moahloli, Corporate Manager at Engen Petroleum Ltd., observed that most countries in Africa evidently recognized both the need and the urgency for regional cooperation. She pointed out that there was evidence of success stories of regional cooperation in various subregions of the continent, and that positive results were beginning to be seen through regional cooperation organizations like ECOWAS in West Africa, COMESA in Eastern and Southern Africa, and SADC. She added that the complexity of the challenges should not be underestimated especially the daunting magnitude of developmental and human-resources constraints and the uneven distribution of resources across the continent. Moreover, the orientation of regional policies to address these disparities was hampered by the urgency of domestic imperatives.

29. She stressed the fact that the relationship between most governments and the private sector was characterized by lack of trust. The main objective of governments, which were the custodians of mineral and energy resources, was to develop these resources in the national interest, whilst that of the private sector was to use capital, technology and skills to earn a profit.

30. She stated that the objective of efficient utilization of renewable energy resources and conversion to other sources, especially in the rural areas, could only be achieved if it was incorporated up-front in the formulation of projects. Consequently, the private sector needed to be persuaded to give due primacy to the long-term perspective, rather than focusing exclusively on short-term returns.

31. Ms. Nthobi outlined the main challenge in subregional initiatives as the lack of sustainability because, in most cases, the main players were the government and the multinational "majors" with very minimal local private-sector involvement. Owing to the high-risk capital-intensive nature of private-sector investment in the energy industry, the private sector tended to orientate its operations to serve external markets in order to guarantee sustainability of operations.

32. She gave an example of the SADC subregion where the four major components of the oil industry operations, namely: reserves, production, refining and consumption were relatively well balanced. The major reserves were located in just one country, Angola, and by contrast 80 per cent of refining capacity was located in South Africa whose demand exceeded 70 per cent of that of the region for petroleum products.

33. She continued that the production of crude oil was set to grow provided the trend towards favourable fiscal terms to attract investment continued. The big multinationals and State-run oil companies were likely to continue dominating production, while consumption of petroleum products had increased steadily by nearly 5 per cent over the past five years. In conclusion, Ms. Moahloli observed that addressing the challenges that specifically affected the region would accelerate the emergence of an African economic bloc as a force to reckon with on the global scene.

35. Hon. Fred Ohene-Kena, Minister of Mines and Energy of the Republic of Ghana, and Chairman of the First Conference of African Ministers Responsible for the Development and Utilization of Mineral and Energy Resources, expressed his sincere thanks to President Nelson Mandela and the government and people of South Africa for the excellent preparations for the conference and the hospitality extended to the delegates. He also thanked the honourable ministers for finding time to attend the conference in spite of their busy schedules and added that their presence demonstrated their commitment to strengthen cooperation in the development of mineral and energy Resources in the continent.

36. He recalled that the first conference which took place in Accra, had noted with concern the paradox that exists between the continent's mineral wealth and the poor socio-economic development achieved. Consequently the conference had recommended increased cooperation among African countries to harness the potential of mineral and energy resources to eradicate poverty and achieve sustainable development.

37. He noted that the Accra conference had also pointed out the necessity of giving more attention to environmental issues related to the development of mineral and energy resources. Failure to do so would result in high social and economic consequences. In respect of energy resources, Hon. Ohene-Kena emphasized that sustainable development of the continent was impossible without the rational utilization and development of energy resources. He further stated that since the Accra conference, a number of protocols in energy cooperation among some subregional groupings had been concluded.

40. Hon. Ohene-Kena noted that the regional conference on energy and mineral resources had developed into a major forum for the promotion of intra-African cooperation. In conclusion he urged all parties to continue to support the conference to strengthen cooperation among African countries in the development of mineral and energy resources.

Consideration of the report and recommendations of the technical preparatory committee (agenda item 4)

41. The Chairman of the second meeting of the Technical Preparatory Committee introduced the report of the committee as contained in document ECA/DUMER/EXP.97/8. The conference considered the report and made the following comments and amendments;

42. In paragraph 36, the Ministers noted that the meeting on copper had been held and that its report would be attached to the final report of the Conference. The meeting had discussed the recommendations of the ECA/UNIDO study on the "Prospects for Increased Production of and Intra-African Trade in Copper Metal and Copper Based Products". The meeting had recommended that the study's findings should be discussed at the intergovernmental level drawing on the experiences of the existing national, regional and international copper related private sector associations. ECA and UNIDO should participate in the discussions and assist with contacts with the international organizations.

43. Paragraph 36: In line with the studies on selected minerals, a member State requested ECA assistance in the promotion of the development of its phosphate deposit.

44. Paragraph 39: The conference recommended the use of modern tools of communication such as the internet and was informed that ECA had its own website which was already operational.

45. Paragraph 45(b) should read as follows: "The possibility for member States to provide periodic progress reports every 12 months to ECA on the implementation status of the recommendations".

46. Paragraph 56 add:- "The Bank is requested to give special consideration to small scale mining projects and loans to the local private sector".

47. Paragraph 69 (e) should read as follows: "There was need to promote inter-country access to existing training facilities. These needed to be fully utilized and that it was necessary to ensure the private sector were partners in this".

48. Paragraph 83, first sentence should read: "Under the UEMOA programme for the rational use of energy, the Programme International de Soutien à la Maîtrise de l'Energie (PRISME) initiative was highlighted with reference to energy conservation and efficiency".

49. Paragraph 94 (a) add: "the installation of a third turbine at Ruzizi II and the planned Ruzizi III hydropower project".

50. Paragraph 94 (a) add also: "the Mpanda Uncua hydropower development project downstream from the Cabora Bassa power station in Mozambique which will supply power to South Africa".

51. Paragraph 94 (b) add: "the envisaged construction of a gas pipeline to link Nigeria, Ghana, Benin, Togo, Côte d'Ivoire and other landlocked countries in West Africa".

52. Paragraph 97, last sentence should read: "UNIDO is requested to assist in this area".

53. Paragraph 120 should read: "The Committee noted that UNIDO through its technical cooperation programme in Africa had supported a number of initiatives at the policy, institutional and enterprise level focusing on the manufacture of renewable energy supply equipment, conservation and improving industrial energy end use, increasing efficiency of present biomass use and introduction of cleaner technologies. The Committee expressed its appreciation for this support to African countries. Appropriate inputs were requested by UNIDO in the development of this programme".

54. Paragraph 121 the last part of the sentence should read: "Regional Economic Communities".

Recommendations of the Mineral Subsector

55. Recommendation 5 should read: "Member States are urged to broaden consultation in policy formulation by involving all stakeholders including chambers of mines, labour unions and civil societies".

56. Recommendation 7 should read: "ECA should, in collaboration with OAU, RECs and other UN agencies, examine the feasibility of establishing the West African Mineral Resources Development Centre and assist in the strengthening of existing ones".

57. Recommendation 12 should read: "ECA should play a leading role in establishing a steering committee consisting of South Africa in its capacity as chairman of the conference, OAU, ADB, and RECs to assist member States with their action plans. It should conduct a periodic evaluation of progress made in the mining sector. The circulation of such evaluation reports would make it easier to share information and to assist those States which had yet to prepare their plans of action".

58. Recommendation 14 should read: "Member States are urged to pursue the creation of an enabling environment for investment in the mining sector. For that to happen, member States could improve their macroeconomic and regulatory framework, as well as harmonize their mineral development policies and strategies. In this connection ECA should assist in comparative studies on mining legislation and investment codes in collaboration with RECs and other intergovernmental institutions".

59. Recommendation 19 should read: "ADB and multilateral agencies are urged to consider increasing their assistance programmes to the mining sector in Africa in general and to the small scale mining sector in particular".

60. The conference added a new paragraph to read: "Member States are urged to harmonize their environmental policies and ensure that a rehabilitation programme submitted by the investor should be part and parcel of the mineral development projects, to minimize the impact of mining on the environment".

Recommendations of the Energy Subsector

61. Recommendation No.3 should include the exchange of experiences in the privatisation of energy enterprises and the financing of energy projects.

62. Recommendation 5 should read: "Member States should promote cooperation among public and private sector entities in the manufacturing of electrical equipment with good market prospects".

63. Recommendation 6 should read: "Member States should establish a data base covering energy potential, development and utilization and ensure its accessibility to potential investors. ECA is requested to coordinate this activity".

64. Recommendation 8 should read: "African regional financial institutions are requested to establish specific energy financing windows for subregional and regional energy projects. ADB is particularly requested to establish an energy fund to finance energy projects to be implemented by the private sector".

65. Recommendation 16 should read: "Member States are urged to actively promote the efficient use of energy resources to reduce any negative impact on the environment in African countries".

66. The conference took note of the report of the Technical Preparatory Committee as amended and is attached herewith as Annex II.

Any other business (agenda item 5)

67. The Ministers noted that the secretariat worked under pressure to prepare the documents for the meeting and that due to time constraints, there had been some delay in distributing the draft report. The Ministers noted, however, that as part of the reform in the intergovernmental machinery, the Committee of Experts on Natural Resources, Science and Technology, which would meet once every two years would provide for sufficient time to prepare for the ad hoc meetings of the Ministers of minerals and energy and those of the Commission.

B. Informal business consultations (Agenda item 6)

68. The Conference provided an opportunity for delegates from the business community to dialogue with ministers and other participants in matters of mutual interest.

Forum to discuss challenges posed by the Conference theme (agenda item 7)

69. The Forum was held to discuss the challenges posed by the Conference theme with particular focus on the following sub-themes:

(a) Harmonizing and promoting cooperation in minerals and energy resources development; and

(b) Attracting increased finance and investment flows into the African minerals and energy sectors.

70. For each sub-theme a panel of selected specialists gave an account of their experiences. The Forum generated debate during which the ministers sought clarification on some issues and gave their opinions on the presentations. The report of the Forum is attached to this report Conference as Annex I.

Adoption of the report and recommendations of the second African Regional Conference on the Development and Utilisation of Mineral and Energy Resources (Agenda item 8)

71. The Conference adopted this report with amendments which have been incorporated. The Conference also adopted the Durban Declaration which appears on the next page.

Closure of the Conference (Agenda item 9)

72. Hon. Albina Assis Africano, Minister for Petroleum of the Republic of Angola gave a vote of thanks. She thanked the ECA for organising the meeting and the Government of the Republic of South Africa for hosting it. She added that the meeting had provided opportunity to gauge progress achieved by the continent in developing its rich mineral and energy resource base. She said that she was convinced that Africa was progressing on the right path especially if the important recommendations the Conference had made were implemented. She added that this required the identification of implementation mechanisms and a commitment on the part of member States. She thanked all the ministers for actively participating in the meeting.

73. On behalf of the Executive Secretary, Mr P.A. Traore informed the Conference that the Secretariat had been particularly impressed with the large turn out by the Ministers which was a reflection of their commitment to the development and utilisation of Africa's minerals and energy resources. He thanked South Africa for being perfect hosts. Mr Traore further thanked the sister organisations present, the intergovernmental organisations, the private sector and the non-governmental organisations. He particularly paid tribute to Eskom, and the other sponsors of the Conference. He underscored the fact that Africa could only move forward through cooperation. In this respect, he was heartened not only by the many important recommendations of the Conference but also by the impact generated by the Minister's forum. In this connection, Mr Traore thanked the panellists for a job well done and implored the members States to implement the recommendations of the Conference. this was the only way the Conference could be of value to them.

74. On behalf of the people and Government of South Africa, Hon. P.M. Maduna thanked all the delegates to the Conference which he noted had been the most representative ever in terms of participation. Hon. Maduna stated that although parting was always a sad occasion, it was necessary for member States to return to implement the Durban Declaration and the other recommendations of the Conference. He believed that Africa had the capacity to develop and that the politicians could catalyse the development of its vast resources. It was Africa's natural resources, especially energy and minerals, which would underpin the continent's development into the next century and alleviate poverty. The minister thanked all the organisations and sponsors who had materially donated generously. As Chairman of the Conference, he reiterated South Africa's and his willingness to do everything possible to implement the recommendations of the Conference. Finally he wished all the delegates a happy and safe journey to their respective destinations.

Durban Declaration on Subregional and Regional Cooperation for the development and efficient utilization of Energy and Mineral Resources in Africa adopted by the Second Conference of African Ministers responsible for the development and utilisation of mineral and energy resources

We, the African Ministers responsible for the development and utilization of mineral and energy resources meeting in Durban, South Africa, on 21 and 22 November 1997 during the second session of our Conference, undertook to review developments in the mining and energy sectors of our countries in the light of the current changes in the world economic environment and in view of the need for Africa to strengthen subregional and regional cooperation among development actors for the sustainable development and efficient utilization of minerals and energy in our continent.

We have reviewed the report of the Technical Preparatory Committee Meeting which met, prior to our Conference, from 17 to 20 November 1997 in Durban, South Africa.

This session of our Conference took place in the context of a rapidly changing world economy in which globalization and liberalization have gathered pace and momentum since our last meeting in Accra, Ghana, in November 1995, with far-reaching consequences for our economies.

We have noted with satisfaction that in general the economic reforms we embarked upon during the last decade have yielded encouraging positive growth rates in many of our economies. We remain strongly committed to the deepening of the on-going reforms and to the creation of a conducive environment to enhance the flow of domestic and foreign investment into the real sector of our economies, particularly, in the mining and energy sectors so as to strengthen their responses to supply the needs of our people. In this endeavour, we will direct our efforts to building the required infrastructural base and to adopting appropriate macro-economic policies and incentive packages in order to enhance the competitiveness of our economies, more particularly those of mining and energy sectors.

We have also noted with satisfaction that investments flowing into the mineral and energy sectors have increased in a number of countries as a result of the current reforms and the increasing involvement of the private sector in mineral and energy supply and distribution. As concessioning and privatization move apace, we perceive the on-going programmes as one of the means of enhancing competition, competitiveness and efficiency.

We, nevertheless, note the somewhat lopsided nature of current privatization trends and their bias towards the commercial operation of utilities and too limited a range of minerals. We look forward to increased and balanced private investment in energy generation capacities (installations) and in the exploration, exploitation and processing of a broader range of minerals.

We are aware of our continent's wealth in minerals and energy and of the potential of bothsectors and of the non renewable nature of fossil fuels and minerals. We are also aware of the need for economic diversification, particularly in the mineral and energy sectors where the potential for industrialization remains largely untapped in most of our countries.

 We believe that energy generation and the development of minerals are critical ingredients in economic growth and sustainable development. We further believe that this is an area in which economic integration can rapidly, efficiently and visibly progress and positively impact on the economies of our countries and eventually contribute to poverty alleviation. We are therefore committed to increasing the level of per capita consumption of minerals and energy in our countries and to strengthening cooperation between our countries for the exploration, exploitation and efficient utilization of energy and mineral resources, which often than not cut across borders.

We take note of the role of artisanal and small scale mining as an economic stop gap. It is also an incubator for entrepreneurship and catalyst for the development of complementary and alternative productive activities necessary for sustainable poverty alleviation on rural areas.

We have reviewed existing regional programmes including regional projects on the interconnection of energy networks (electricity, oil and gas) and the cooperation in mineral and energy research and development centres. We further took note of mining and energy programmes developed by various regional and international organizations including the ADB African Energy Programme, the World Energy Council's Initiatives for Africa, the OAU- coordinated programme for the establishment of the African Energy Commission (AFREC), to related activities of ECA and UNIDO as well as those of the various subregional groupings (UMA, ECOWAS, UEMOA, ECCAS, COMESA, SADC, EAC, IGAD, CEPGL and others). We also noted that there was an urgent need for coordination in these programmes and that cooperation between the various actors in support of our energy and mining sectors should be encouraged.

We are mindful of the need to closely link the exploration, exploitation and utilization of energy and mineral resources to the management of the environment in order to ensure the sustainable development of our natural resources.

While we reaffirm our determination to strengthen intra regional cooperation for the sustainable development of minerals and energy in Africa in the short and medium term, we, nevertheless, regard the long-term perspectives of the mining and energy sectors in Africa as a source of challenging opportunities requiring foresight in such critical areas as strategic economic management, research and development, and the building of financial, institutional and technical capacities.

In the light of our findings and those in the reports considered by the Technical Preparatory Committee, we have resolved to:

 (i) design and implement integrated energy and mining development strategies and policies in the context of the on-going economic reforms;

(ii) stress the importance of regional energy and mineral development projects including the interconnection of electricity grids, gas and petroleum pipelines and related infrastructures. To this end, we reaffirm the priority accorded to such projects by our respective governments and our determination to mobilize adequate resources for the funding of regional energy and mineral development projects and urge regional development banks and technical assistance agencies to allocate more funds to such projects in their lending portfolios and/or technical assistance budgets.

(iii) promote mechanisms for the pooling of existing capacities and the building of others in the area of mineral and energy development.

(iv) promote the establishment of databases, information exchange networks and the sharing of experiences in the management and development of the energy and mineral sectors using electronic mail, the internet and other means for the interactive dissemination of mineral and energy information;

(v) cooperate in research and human resources development within institutions such as the minerals and energy research and development centres, minerals and energy policy centres and the "Ecole Supérieure Inter-africaine d'Electricité (ESIE)" of the African Union of Electricity Producers and Suppliers (UPDEA) and to facilitate access to those institutions.

(vi) urge our utility corporations and other investors to promote industrial projects upstream and downstream of the mineral and energy sectors to enhance production levels of manufacturing. Technical assistance from UNIDO in this domain would be appreciated.

(vii) to create an environment conducive to increased domestic and foreign direct investment and to urge the multilateral and bilateral financing institutions, including the African Development Bank Group to create special windows for the funding of regional energy and mineral development projects and to allocate more funds to such projects in their lending portfolios and/or technical assistance budgets;

(viii) urge the African Development Bank to continue its support of the proposed African Energy programme and to allocate adequate resources to this end;

(ix) undertake, in cooperation with institutions such as ADB, WEC, OAU, etc., the harmonization and rationalization of existing regional energy and mineral development support programmes; 

(x) urge the OAU Secretariat to accelerate the completion of the feasibility study for the establishment of the African Energy Commission (AFREC) as a coordinating/networking institution with lean and efficient structures;

(xi) establish an efficient regulatory framework which would, inter alia, ensure that environmental impact studies are conducted on all energy and mineral development projects;

12. give due consideration to new and renewable energy sources, rural electrification, artisanal and small scale mining activities for the alleviation and ultimate eradication of poverty and the economic empowerment of women in the rural areas;
13. urge the private sector to fully participate in the development and efficient utilization of energy and mineral resources in Africa and to organize itself to this end.

(xiv) note and recognize the important contribution women can make in the development and utilization of minerals and energy. Therefore, governments are urged to take relevant steps to further enhance their contribution to socio-economic development.

These measures will be reflected in our national plans of action and in the programmes of subregional groupings in Africa and will provide a framework for monitoring purposes.

 We urge the multilateral and bilateral technical assistance and financial institutions to fully support our countries and organizations in furthering the objectives of our plans of action for the development and efficient utilization of energy and mineral resources in Africa. In so doing, their actions should supplement our own efforts during the transitional period required for our economies to boost their competitiveness to the level of the emerging world trading system.

As we embark on the negotiations for the renewal of the Lomé Convention, we urge the European Union to maintain the SYSMIN facility and to simplify procedures governing fund access and disbursement.

We express our deep appreciation to the Government and the people of South Africa for hosting our Conference and offering us the opportunity of drawing from their rich experience in energy and mineral resources development in both the private and public sectors.

ANNEX 1

REPORT OF THE MINISTERIAL FORUM HELD ON 22 NOVEMBER, 1997 TO DISCUSS THE CHALLENGES POSED BY THE CONFERENCE THEME

OBJECTIVE

      1. The major objective of the forum was to provide an interactive platform between ministers and experts from various fields to examine the conference theme in more detail. It was hoped that the exchange of views and experiences between the experts and the ministers would sharpen the focus of the Conference into a narrower set of issues which have the potential to generate a greater impact than would too many considerations.

ORGANISATION

2. The forum was organised around two sub-themes, namely:

(a) Harmonising and Promoting Cooperation in Minerals and Energy Resources Development;

(b) Attracting Increased Finance and Investment into the African Minerals and Energy Sectors in the Light of Global Competition for Resources

3. Cooperation among African member States is the cornerstone for mitigating against their weak economies in the light of marginalisation effects expected from the increasing globalisation of trade and investment. This was the major reason for choosing the two sub-themes.

4. Each of the sub-themes was reviewed by a panel of experts in minerals and energy development. The presentations were then followed by a general discussion of the sub-themes. In total, there were four panellists to discuss the sub-theme in minerals development, while there were five for that in energy development.

ACCOUNT OF THE MINERAL SUBSECTOR

5. The four panellists for the mineral sector discussions were:

6. Ms Labonne addressed the issue of small scale mining as a potential tool for eradicating poverty and promoting technical cooperation in Africa. She pointed out that although small scale mining supported 15 - 20 million Africans, the operations were transitory and not capable of absorbing non-productive costs in social infrastructure. It was primarily opportunity driven because it supplemented other income generating activities. It was also poverty driven because it did not often reach scales of economy. Traditional projects promoting small scale mining had generally not succeeded because they did not address the dimension of poverty and sustainability.

7. Ms Labonne outlined a new pro-poor paradigm in which small scale mining could be used to economically anchor other more sustainable productive activities such as agriculture and cottage industries through reinvesting mining earnings. This approach was being tested through a pre-feasibility study in one African country. The project, which was participatory in nature, had poverty eradication as its major objective. It aimed at collecting broad information on the technical, policy, marketing and finance in order to identify different approaches for building capacities in small scale mining. Gender would also be main streamed into the project.

8. Ms Labonne stated the expected results of the pre-feasibility project as definition of methodologies and pro-poor regions for project implementation; plan of action supportive to the involvement of local communities and Government agencies; and a document for detailed programme implementation. The elements of cooperation in the project lay in the novel approach of the project in mainstreaming poverty eradication using small scale mining as a catalyst in a way which placed people first. She emphasised that these were essential elements for achieving the basic goals of cooperation.

9. Dr. John Stewart discussed the challenges of improving cooperation from a private sector perspective. The first of these was the effective involvement of the private sector in policy formulation. This required the formation of national chambers of mines and their interaction at the subregional level. He outlined the areas of involvement by chambers as lying in influencing national legislation to minimise mining risks, participation in the formulation of regional protocols and international conventions, and core drafting of legislation in areas such as mine safety and health.

10. Dr. Stewart outlined the second challenge as enhancing human and technology development. The core funding of research and educational institutions was the responsibility of the State, as was the longer term development of technology. The private sector, however, had a major facilitative role to play in the utilisation of research and learning facilities.

11. Thirdly, the provision of infrastructure in mining areas represented a major difficulty. This was an area in which aid agencies could join hands with the State to facilitate infrastructural development. Dr Stewart saw the creation of an enabling environment as the final major challenge. The list of relevant factors in this respect included the legislative environment, the security of tenure of mineral rights, the taxation structure, institutional capacities of government departments, the free movement of capital and skills and the disposal of mineral products.

12. Mr. Chowa John Chanda talked about the role of SADC sector coordinating units as the focal points for guiding the process of subregional cooperation. The Mining Sector, which was created in 1982, had undertaken a number of thematic surveys the results of which had determined the structure adopted by the sector. This comprised six sub-committees, namely geology, mining and marketing, mineral processing, environment, human resources development and information. The mining sector's portfolio of projects was implemented by experts from the member States who constituted the sub-committees.

13. Mr. Chanda outlined that a Mining Protocol had been signed by the Summit in 1996. This had represented a long process of consultations with all stakeholders to articulate the specific areas of cooperation. He saw the major challenges of cooperation as implementing structures and policies which attracted international mining investment. This required consensus building especially with the private sector. In the Mining Unit, a structure for private sector participation had been worked out through the chambers of mines in the subregion.

14. Mr. James Anaman focused his address on the background and role of Ashanti Goldfields Company in promoting cooperation. He emphasised that the achievements of Ashanti had been due to the support from Governments in countries in which Ashanti worked. The Government of Ghana had also supported the company by allowing it to be floated on the international money markets. The company had grown into a major African multinational with 35 projects in 14 African countries. In terms of regional cooperation, Ashanti was cooperating with Gencor, a South African major mining company, in the use of biotechnology gold recovery methods. This had resulted in Ashanti building the world's largest biotechnology gold plant in the world. Ashanti also promoted cooperation through the development of African human resources through highly focused training schemes whose long term goal was the local management of operations. A last aspect of cooperation involved educational visits of employees from different countries to various company facilities. Other than the learning aspect, the visits fostered a group spirit among the employees.

15. The new approach to integrate small scale mining into rural development initiatives drew the interest of many of the ministers who requested how the project could be accessed. They noted that there was opportunity for this after the initial trial period of the project. The Ministers also noted the importance of safety of humans and the environment and that Ashanti's biotechnology for gold processing was environmentally friendly; the need for including a regional dimension in national projects; and the important role of chambers of mines and other related associations.

ACCOUNT OF THE ENERGY SUBSECTOR

16. The Panellists for the Energy Subsector were :

1. Mr. Tony Kimpton, Consultant in Corporate strategy at ESKOM;

17. Mr. Tony Kimpton discussed the future of the Electricity Supply Industry (ESI) in Developing countries. He said that the objective of the ESI was to provide a reliable, adequate, and environmentally sustainable supply of electricity at competitive prices compared to other sources of energy.

18. He indicated that a reliable supply of electricity was necessary but not a sufficient condition for economic growth and social development. In order to make an ESI competitive, governments needed to create conducive conditions to attract investment into the supply of electricity by ensuring political and financial stability.

19. He noted that since investment in the ESI was capital intensive with high financial risks, Governments and the industry could reduce this risk by adopting appropriate strategies and policies.

20. Finally, he stated that electricity had become a commodity which was traded like any other. Thus the supply and demand for electricity needed to be matched while demand fluctuations needed to be reduced. Since most developing countries had energy supplies based on a single source, there was an incentive for ESIs to cooperate or even merge into a large utility. This offered a better chance of reducing risks and increasing competitiveness.

21. Mr. Freddie. O. Mothatlhedi said that access to commercial energy sources in Africa, compared to other regions, was very low. He stated that 75-95 per cent of Africa's energy was derived from biomass which had detrimental effects on the environment. This pattern of energy consumption, coupled with high population growth rates, was threatening Africa's survival. Coordination at all levels in the energy area was therefore imperative to avoid the negative effects of energy use.

22. He noted that in order to resolve the issue of the energy sector, African leaders had resolved that an African Energy Commission be established. The OAU, as the organ entrusted with the implementation of the resolution, had prepared studies which showed the advantages of establishing such an organisation. These included: sharing excess supply, pooling of investment and resources, and coordination and harmonisation of activities in the energy sector.

23. In conclusion, he noted that the experience of SADC in the energy field clearly showed the advantages of cooperation and the need for an organisation entrusted with coordination. He added that the structure proposed for the African Energy commission was lean and appropriate to the tasks and duties entrusted to it.

24. Dr. Rangaswamy Vedavalli addressed the issue of attracting increased finance and investments into the African minerals and energy sectors in the light of global competition for resources.

25. She said that attracting finance for the energy resources development required creating an enabling business environment and that lessons drawn from experiences in developing countries, including African countries, indicated that attracting finance for energy projects needed to meet the following four major challenges:

26. She added that these factors, including macro-economic stability and good governance were the pillars to ensure financing for energy.

27. Dr. Vedavalli concluded her statement by saying that in order to achieve cooperation and implement energy projects in an optimal manner, it was necessary to have effective African leadership operating in partnership with energy consumers and investors. This would promote the supply and use of energy for the benefit of the African people.

28. Dr. Colin McClelland addressed cooperation from a private sector perspective. He said that a major pre-requisite for cooperation in the energy sector was trust between all the players. Trust was slowly emerging and that this conference was an example of this. Dialogue among the various players was necessary for understanding each other, creating a common vision and achieving that vision.

29. He explained that the private sector had to be competitive and efficient or fail financially. State corporations, on the other hand, could count on the State for additional funds. Given these constraints and in order to attract private investment in the energy sector, it was necessary for countries to have a lower risk profile which in turn lowered the cost of borrowing and investment costs.

30. He underlined the importance for developing countries to develop local capital markets as it was not always possible to attract international funds in the quantity required. He further noted that developed countries should help with seed money for energy projects while the bulk of investment should come from local sources.

31. Finally he said that the role of the government should be to create conducive conditions and provide infrastructure for development and let business decide what to do and in what to invest.

32. Mr. Benoit Munanga from Eskom, speaking on behalf of the Union of Producers, Conveyors and Distributors of Electrical Energy in Africa (UPDEA), said that UPDEA was an NGO grouping 29 power utilities represented in all the African subregions.

33. He said that the main objective of the organization was to exchange expertise in the operational aspects of electricity production, transmission and distribution through its technical

committees; as well as human resources development and research through the Ecole Supérieure Inter-africaine d'Electricité (ESIE).

34. He concluded his statement by saying that the challenge facing African member States and electric power utilities was to achieve a higher degree of rural electrification, privatisation and deregulation.

35. In the discussion between the Ministers and the panellists, the key points which emerged were that the large investment in energy projects was not matched by the lack of maintenance of installed capacities. There was therefore a critical need to remove this and other inefficiencies through a cooperative approach;

36. Coordination and harmonisation was critical to sharing energy in Africa. In this respect, the proposed Energy Commission was crucial and its feasibility should be completed within 1998. The establishment of an African Minerals and Energy Commission should be considered.

37. The deregulation of the energy sector should consider the strategic nature of the industry and its impact particularly in small African economies. Furthermore, the electrification of rural areas, due to its social and not necessarily economic context, was a major challenge to private sector-based energy projects. In this regard, there was a major role for governments in projects of social benefit which were critical to the socio-economic development of the continent.

IMPACT OF THE FORUM

38. The forum was innovative in the sense that it was the first time it was implemented during the Conference of African Ministers Responsible for the Development and Utilisation of Minerals and Energy Resources. Despite this, the unanimous opinion of Ministers was that the forum was very useful. The ministers appreciated the initiative taken by ECA to organise the Forum which had given them the opportunity to interact with the experts. In this connection, they congratulated the panellists for the presentations and the discussions. However, a major handicap was the lack of time to exhaust all the enthusiastic discussions. If another forum is organised, more time should be devoted to the discussions.

ANNEX II

REPORT OF THE TECHNICAL PREPARATORY COMMITTEE OF THE

SECOND REGIONAL CONFERENCE OF AFRICAN MINISTERS

RESPONSIBLE FOR THE DEVELOPMENT AND UTILISATION OF

MINERAL AND ENERGY RESOURCES

ECA/DUMER/EXP.97/8

4. The Committee unanimously elected the following countries to the Bureau:

Chairman - South Africa

First Vice-Chairman - Senegal

Second Vice-Chairman - Algeria

First Rapporteur - United Republic of Tanzania

Second Rapporteur - Democratic Republic of Congo

5. The Committee established two sub-committees comprising experts in the mineral and energy sectors. This was done to strengthen deliberations on the central theme of strengthening cooperation among development actors in the sustainable development and utilization of mineral and energy resources in Africa.

B. Agenda

6. The Committee adopted the following agenda:

Plenary session

Sessions of the sectoral sub-committees

Plenary session

9. Consideration of the Provisional Agenda of the ministerial meeting

11. Closure of the Meeting of the Technical preparatory Committee

12. Special meeting on the African copper industry.

C. Account of proceedings

Opening addresses

7. In his opening address, Hon. Dr. Zola Skweyiya, Acting Minister of Minerals and Energy of the Republic of South Africa, welcomed participants to Durban. He noted that the Conference would specifically, focus on policies and strategies for strengthening cooperation among development actors to ensure the sustainable development and utilization of mineral and energy resources in Africa. He urged the meeting to earnestly review the recommendations of the 1995 Accra Conference with a view to improving future policies, strategies and programmes.

8. The Minister pointed out that the theme of the Conference required that in the formulation of mineral and energy policies, both governments and the private sector should be cognizant of the socio-economic conditions of the people, particularly the rural poor. He said it was important that during the next millennium Africans should strive to be innovative in the socio economic and technological sectors. He expressed optimism about Africa's future and hoped that regional cooperation and integration would soon be a reality as envisaged by the Treaty establishing the African Economic Community.

9. The Minister informed the meeting that since 1994 when South Africa attained its democracy, the Government had been restructuring State owned enterprises to make them more efficient. This included those in the minerals and energy sectors.

10. Hon Skweyiya noted that although Africa's endowment in mineral resources was in some cases better than other major mineral producing regions of the world, most of its mineral wealth remained unexploited. This was despite the availability of basic infrastructure and sufficient human resources. He stressed that adequate investment to exploit mineral resources would reduce poverty and ensure socio-economic stability. In this respect, he expressed appreciation towards the observed increased spending on Africa's mineral exploration programmes by the international mining companies. He also advocated for policies which emphasized downstream beneficiation to increase the value of mineral products rather than the export of mineral raw materials. He said that this would generate more employment, revenue and create satellite industries.

11. The Minister also pointed out that South Africa's energy needs were tied to the Southern Africa subregion and cited examples within the framework of SADC which he said had established the Southern African Power Pool. He said that some funding for the Power Pool had been secured and the "rules of the game" were virtually in place .

12. The Minister also cited the East African Regional Hydrocarbon Study extending from Durban to Ethiopia funded by the Canadian government as a good example of regional cooperation. He said that the study provided an opportunity for the stakeholders to determine the economic potential of hydrocarbons. The Minister recommended that in the spirit of self reliance, Africans needed to develop their institutional capacities before looking for support from abroad. He added that in developing mineral and energy resources, due attention should be given to environmental, health and safety matters while women had to be effectively integrated into the sectors as a way of alleviating poverty. The development of mineral and energy resources also had to benefit the people.

13. In conclusion, Hon. Skweyiya paid tribute to the organizers of the Conference and urged the delegates to come up with concrete recommendations for the Conference of Ministers to consider. He further urged governments to continue supporting the United Nations Economic Commission for Africa in its endeavors to promote regional cooperation and integration in the minerals and energy sectors. He then declared the meeting of the Technical Preparatory Committee open.

14. Mr. Mbaye Diouf, Director of RCID, welcomed participants to the second session of the Technical Preparatory Committee of the Regional Conference of African Ministers responsible for the development and utilization of mineral resources and energy. He delivered best wishes from Dr. Amoako, the ECA Executive Secretary and UN Under Secretary General, to the Conference and requested Minister Zola Skweyiya to convey to Minister Maduna, ECA's appreciation for his personal commitment to organizing the Conference and for the excellent facilities put at the disposal of participants. Mr. Diouf also expressed his appreciation to the South African staff serving the Conference and to the private sector whom he considered to be major players in the restructuring and development of the mineral and energy sectors in Africa.

15. Recalling the paradox between the mineral wealth of the continent and its poverty, Mr. Diouf outlined that the theme of the first session of the Conference held in Accra in 1995, had been "Policies, strategies and programmes for a greater contribution of mineral resources and energy to the socio-economic development of Africa". Although meaningful macro-economic reforms had been undertaken by Governments, linkages of the african mining industry, with other economic sectors remained very low. This was in spite of increased investments in the industry.

16. Mr. Diouf mentioned that the same situation prevailed in the energy sector and that cooperation among African countries in both sectors was still weak. The potential was high to increase cooperation, especially in technology development and utilization, the development of skills and the promotion of investment into the sectors. South Africa, he added, could provide take the lead in this respect.

17. Mr. Diouf noted that Africa was lagging behind other world regions in terms of consumption of energy and that only five per cent of its large energy potential had been developed. In the mineral sector, production was export-oriented. While expert-revenues contributed to the economic growth of many countries, the continent exported only raw minerals. The low rate of minerals processing in Africa explained the low contribution of minerals to the socio-economic development of the continent.

18. Mr. Diouf reminded the meeting that the Accra Conference had emphasized two major constraints in the mineral industry: lack of effective cooperation and the poor participation of the private sector. It was for that reason, the ECA Secretariat had proposed the present Conference theme which was "strengthening cooperation among partners in the sustainable development and utilization of mineral and energy resources in Africa".

19. He underscored the need for effective mechanisms of cooperation in the formulation and implementation of national, subregional and regional programmes for developing Africa's rich mineral and energy potential. Given its experience and proven capacity in this area, South Africa was expected to play a leading role. He therefore encouraged participants to take advantage of their presence in Durban to create networks for that purpose.

20. He informed the Committee that a special meeting on the African Copper Industry was planned during the current Conference. In conclusion, Mr. Diouf said that he hoped that the Durban Conference would mark a new beginning in terms of the relevance and substantiveness of its decisions.

21. Speaking on behalf of the South African private sector mining industry, Mr. T.R.N Main, Chief Executive of the Chamber of Mines of South Africa, welcomed all delegates to South Africa, particularly, those visiting the country for the first time. He added that he considered it a singular honour to speak on behalf of the industry. He further expressed appreciation to ECA for directly involving the private sector in the meeting.

22. Mr. Main outlined that there were two primary industries, namely agriculture and mining. He illustrated the importance of the mining industry by pointing out that coal provided 92 per cent of electric energy in the SACU region, 81 per cent in Africa and 62 per cent in the world as a whole. He emphasized that the influence of mining on national economies went far beyond the economic benefit and included social and infrastructural development. Mr. Main illustrated this by recounting the various contributions the industry had made in South Africa to higher education, research and growth of infrastructure. This underscored the need to attract the foreign private sector into the industry but this required receptiveness from Governments. He stressed that Africa had to compete globally for exploration and long term foreign direct investment. The continent therefore had to be as attractive as any other.

23. Mr. Main underscored the inherent risks in mining operations which included the geological and technical risks, as well as the lack of Government assurances that the right to mine would be granted after exploration activities. He spelled out Governments' role as creating a policy and economic framework conducive to mutually beneficial private sector investment. This needed to be underpinned by clarity, transparency, enforceability and simplicity. Regulations relating to safety and environment needed to be broad based and appropriate to country circumstances.

24. Mr. Main observed that a recommendation in the paper on the role of the private sector was that associations such as the Chambers of Mines should be encouraged. He fully supported the view and reiterated the need for effective partnerships. In conclusion, Mr. Main observed that given an enlightened mineral policy, Africa's mineral wealth could be unlocked for the benefit of all its citizens.

25. Mr. Colin McClelland, Director of the South African Petroleum Industry Association (SAPIA) stated that the energy sector in Africa presented a great opportunity for fostering accelerated economic development. Despite Africa's rich energy resources, state control in most African countries had discouraged large scale private capital investment in the energy sector.

26. He added that due to changing global economic and political trends, Africa had begun to take stock of its predicament. This had lead to transition to democratic systems. As a result, Africa in general and SADC in particular had registered average GDP growth rates of 6 and 5 per cent respectively.

27. He indicated that in order for development to take root in Africa, five important factors had to interact. These were: a proper investment climate, a stable political climate, cooperation between government and business, regional cooperation, and the development of the continent's energy resources.

28. He emphasized that sound economic policy, coupled with economic infrastructure such as an efficient energy system, was a prerequisite for attracting foreign investment. He added that another critical factor in many parts of the continent was peace and stability. He said while cooperation between the government and the private sector was only emerging, there was a need for trust between the two sides to foster this process.

29. He noted that favourable energy development strategies required major shifts in national policies and no single country had the capacity or the resources to undertake the shift alone. It was therefore, necessary for African States to cooperate in the development of their energy resources. In conclusion, he reiterated the need for the continent to formulate a programme for long-term recovery. This programme should have clearly defined short and medium-term recovery strategies to enable the continent to enter the category of middle income group in the near future.

30. On behalf of Mr. Fred Ohene-Kena, Chairman of the First Conference of African Ministers Responsible for the Development and Utilization of Mineral and Energy Resources and the Government and people of Ghana, H.E. Yaw Osei, the Ghana Minister-Counsellor in Pretoria, South Africa, welcomed the participants to the meeting. He expressed his appreciation to H.E. President Nelson Mandela, Hon. Maduna, the Minister of Minerals and Energy Affairs, and to the Government and People of South Africa for the excellent preparations for the Conference and the hospitality extended to the delegates. He also expressed appreciation to the United Nations Economic Commission for Africa for having convened the meeting.

31. From a mining view point H.E. Osei stated that the mining industry, particularly the gold mining industry, had experienced a dramatic downturn in its fortunes and this adversely affected the gold producing countries like Ghana. In the energy sector, he stressed that all African countries needed to develop additional energy infrastructure to ensure equitable distribution of energy to the entire population, especially rural people, to facilitate social and economic development.

32. He added that the requirements for capital investments to address the problems resulting from greenhouse emissions due to over-dependence on fossil fuels and the unsustainable exploitation of forests were beyond the means of many governments in the short to medium term. He called upon African member States to foster a stronger partnership between the public and private sectors accelerate the development of energy industries.

33. He concluded his statement by inviting the participants to review progress made since the last session of the Regional Conference held in Accra, Ghana, in November 1995 and to make recommendations that would benefit the African countries.

PROCEEDINGS OF THE MINERAL SUB-COMMITTEE

Consideration of progress achieved in the implementation of the recommendations made by the first Conference of African Ministers responsible for the development and utilization of mineral resources and energy: mineral subsector (agenda item 4)

34. The sub-committee considered document ECA/DUMER/EXP.97/1 "Progress achieved in the implementation of recommendations made by the first Conference of African Ministers Responsible for the Development and Utilization of Minerals and Energy Resources" held in Accra, Ghana from 20 to 23 November 1995.

35. The document focussed on ECA's activities in implementing the recommendations of the Conference which had since been adopted by the ECA Conference of Ministers, and from which ECA programme elements had been included. Efforts had also been made to disseminate the recommendations to member-countries and institutions. Some of the activities were undertaken in cooperation with the outgoing Chairman of the Conference, the Minister of Mines and Energy of Ghana.

36. With regard to selected minerals, the current (1996) state of the iron, aluminium, copper, gold, diamond and phosphate industries in Africa had been studied in detail. This was in recognition of their potential role in industrialization, agricultural production and export earnings. A special meeting on copper was scheduled to be held during the current session on the basis of a study jointly undertaken by ECA, UNIDO and MINTEK.

37. In the studies, emphasis had been put on the need: (a) to intensify subregional cooperation and integration in mineral exploration, processing and utilization; (b) to produce minerals to meet demand in the region; (c) use minerals to construct the basic infrastructure in Africa; and (d) to develop the scientific and technological capacities needed to achieve these objectives.

38. With regard to privatization, an ad-hoc meeting of experts had been organized, in October 1996, to discuss guidelines for the development of natural resources and energy with emphasis on privatization and deregulation. A technical publication had been issued on privatization in the mineral and energy industries. A comparative study was being finalized on the legal and regulatory frameworks for the development of mineral resources in a number of African and other developing countries. ECA had also participated in meetings of the Multilateral Investment Guarantee Agency (MIGA) on the financing of mining projects in Africa held in 1996 and 1997 in Montreal and Denver/Colorado, respectively.

39. Regarding the standardization of databases, ECA's activities had taken root with the launching of the African Information Society Initiative (AISI) which provided for customizing information systems on mineral resources. A biennial information bulletin would be initiated in December 1997 to disseminate mineral information to member States.

40. In accordance with an ECA Conference of Ministers decision, the Secretariat had included in its 1997 work programme, a study on evaluating the productivity, environmental impact, health and safety risks involved in small-scale mining. Similarly, ECA had included in its work programme an assessment of the institutional framework for subregional cooperation in the development of mineral resources and energy. These studies would be followed by a seminar on strengthening the institutional framework for cooperation in each of the five subregions.

41. The 1997 issue of the directory of African mineral and energy experts was about to be released despite the poor response received from the experts concerned. The Secretariat had also prepared a framework for a plan of action for consideration at the meeting.

42. Major meetings and other events which took place since the first session of the Conference included: the SADC sectoral meetings on mineral resources, the Conference on Petroleum and Minerals in Sub-Saharan Africa, the MIGA/World Bank Symposium on Promoting Mining Investment in Africa and the International Geological Congress.

43. The main phenomena characterizing the industry had included: (a) the opening up of the African mining sector to private investment; (b) the growing regional importance of a few African mining companies; (c) the emphasis on gold-sector investment; (d) increased focus on small-scale mining; and (e) the multiplicity of African mining sector meetings.

44. The report concluded that implementation of the recommendations of the first session required coordinated actions at the institutional and country levels.

45. The Committee listened to national experiences in relation to the implementation of the Accra recommendations. It observed that the implementation rate of recommendations remained low and that there was need for the meeting to establish mechanisms to improve the implementation rate. In this connection, the Committee considered a number of actions such as:

(a) The need to have a national contact point to work with ECA. The meeting observed that ECA was making efforts to create focal points in the member States and that this had been done in countries such as Mali and Ghana with respect to small scale mining;

(b) The possibility for member States to provide periodic progress reports every 12 months to ECA on the implementation status of the recommendations;

(c) Improving communications between ECA and the member States in respect of documentation. ECA's efforts to promote electronic mail to this end were hailed.

(d) The need to broaden follow-up actions into critical areas such as training and the establishment of organizations to provide information services;

(e) The need for guidelines to assist the member States in the follow-up of recommendations;

(f) The need for ECA to compile previous recommendations to assist member States who had not attended previous conferences.

46. Despite the low implementation rate of recommendations, the Committee observed that several member States had implemented a number of actions which included: cross-border investment and the sharing of expertise; toll refining of nickel matte; implementation of national and regional geoscience data management programmes to develop both national and subregional capacities; review of mining codes to improve the participation of the private sector in mineral resources development; encouragement of the small scale mining sector and the development of cooperation mechanisms, including the Mining Protocol by the SADC Mining Sector coordinating Unit which outlined the principles of cooperation.

47. The Committee underscored the importance of cooperation despite the persistence of fears that national interests would be eroded. This was critical to the development of the continent. The Committee further agreed that cooperation needed to address institutional frameworks and downstream processing activities.

48. The Committee endorsed the report based on the above considerations.

Review of the main theme of the conference on "Strengthening cooperation among development actors in the sustainable development and utilization of mineral and energy resources in Africa" (agenda item 5)

Role of Governments in strengthening (sub)regional cooperation in the development and utilization of mineral resources (agenda item 5.1)

49. The Committee considered document ECA/DUMER/EXP.97/3 on the above subject and noted the desire of African Governments to pool their capacities in order to compensate for national inadequacies in development factors. This concern had been translated after independence into the establishment of community institutions. Until the late 1980s, the concern had been nourished by the fact that none of the countries, taken individually, had the expertise, management, funding capacity or an adequate market for minerals and mining products. These factors had prevented Governments from assuming effective control of the mining industry, although in the 1960s and 1970s, monopolistic policies, had resulted in the nationalization of production plants. One way of minimizing the effects of these constraints was to cooperate.

50. The document underscored the fact that in the 1990s, States were withdrawing from mining operations as the role of the private sector in the African mining industry was strengthened. States were enacting laws and issuing mining regulations making sure that they were enforceable and, above all, creating an enabling environment for private investment. On its part, the private sector was supposed to provide technology, expertise and financial resources.

51. Despite the changes, intra-African cooperation in mineral resources development was still important. For instance, the activities of foreign transnational corporations was limited to the exploration, extraction and export of mineral commodities and targeted only a few minerals. State intervention was required to promote value added and trade in mineral products. With the globalization of world trade and the establishment of powerful trading blocs, the need for regional cooperation had loomed large.

52. The document highlighted the main constraints to the strengthening of subregional cooperation in mineral resources development, more specifically the inadequacies of community institutions. The inadequacies included structural weaknesses, poor management of the institutions, limited financing of operations and the lack of rationalization and coordination.

53. The Committee debated the report at length and formulated the following recommendations.

54. Member States were urged to:

55. ECA should:

56. ADB should look into the possibility of establishing a special machinery for the financing of African mining projects. The Bank is requested to give special consideration to small scale mining projects and loans to the local private sector.

57. The community institutions for the development of mineral resources should coordinate their activities and network among themselves.

58. The Committee stressed the need for sharing experiences in the development of mineral resources particularly through country visits and (sub)regional fora. In this regard, participants sought clarifications as to how the recommendations of the current session would be implemented given the decision of the ECA Conference of Ministers to replace the current forum with a committee of experts on natural resources, science and technology which would, among other things, consider issues of mineral resources development and utilization. It was explained that each time the need should arise, a special session of the Conference of African Ministers responsible for the development and utilization of mineral and energy resources would be convened.

The Role of the Private Sector and other Development Actors in Strengthening Subregional and Regional Cooperation in the Development and Utilization of Mineral Resources in Africa (Agenda Item 5.2)

59. A representative of the Secretariat presented document ECA/DUMER/EXP.97/5 which outlined the role of the private sector and other related actors in strengthening subregional cooperation in the development and utilization of mineral resources in Africa. The report pointed out that the growth periods of mining investment on the continent had historically been associated with the participation of the private sector. For the industry to make a significant contribution to Africa's socio-economic development, the participation of private operators in mineral development was required.

60. It was further pointed out that in promoting private sector participation, due regard should be given to risk factors and profit imperatives. Governments needed to recognize that international mining companies had continued to view the African mining environment as having a relatively higher political risk, an unstable fiscal environment and an excessively bureaucratic regulatory framework.

61. The current role of the private sector in human resources and technology development was reviewed as well as the roles of multilateral agencies including the World Bank, IFC and the EU Sysmin programme. It was observed that generally the quantum of financial resources flowing into the African mineral sector was low and needed to be increased. It was further noted that the multilateral agencies could do more to develop capacities and local entrepreneurship.

62. With respect to private sector associations, such as Chambers of Mines, mineral-specific and small-scale mining associations, it was observed that these were not common in the African continent. This robbed the industry of fora for leveraging the interests of the private sector in policy formulation. It also diminished opportunities for increasing the knowledge base in the industry.

63. The private sector needed to strengthen its role in the development of skills at all levels and in supporting research efforts as well as linkages with other economic sectors. The report further concluded that multilateral agencies needed not only to increase the level of financial assistance to the African mineral sector, but also to diversify into higher impact mineral projects in addition to the provision of infrastructure in support of such projects. Private sector associations, needed to be formed both at the national and (sub)regional levels. It was emphasized that the private sector could indeed be partners in cooperation without compromising the profit motive.

64. The Committee debated the report at length. Accounts of the role of the private sector in promoting (sub)regional cooperation were also given by mining corporations, member States and the intergovernmental organizations present at the meeting.

65. The Committee took note of the support the Ghana Chamber of Mines had given the mining industry in Guinea to form a Chamber of Mines and that the Ghana Chamber of Mines was ready to extend similar assistance to other countries in the region.

66. The Committee further noted the activities of Ashanti Goldfields Limited which had grown into an African gold mining multinational company with 35 active exploration projects in 14 African countries. The Committee further observed that Ashanti was decentralizing its decision-making structures to the operations in other African countries and had an extensive training programme for talented young Africans to prepare them to work in any company operation in Africa. The Committee noted that the company was also utilizing technology developed by Gencor, a South African company and that this augured well for private sector cooperation.

67. The Committee recognized the activities of UNIDO in the transformation of mineral resources, in improving production processes, quality control, human resources development and in strengthening the capacities and capabilities of (sub)regional centres for applied research in mineral development.

68. The Committee also acknowledged the activities of UNCTAD in mineral resources development which included economic and environmental policy analysis, dissemination of statistical mineral data and technical assistance in various training programmes including governance, risk management and negotiating procedures with transnational corporations (TNCs).

69. The Committee agreed that in discussing the role of the private sector, there was need to distinguish between the TNCs and small scale mining operators who experienced severe difficulties in many areas. The Committee recommended the following actions:

(a) Multilateral agencies were urged to increase their assistance programmes to the small scale mining sector. In addition there was need to develop local entrepreneurship and mechanisms for raising finance through local financial institutions and stock exchanges;

(b) It was necessary to diversify mining projects to include industrial minerals;

(c) Governments, acting with the private sector, needed to present a unified position to extend the Sysmin programme beyond the year 2000;

(d) Local support industries should be developed to increase the retained value of mineral projects;

(e) There was need to promote inter-country access to existing training facilities. These needed to be fully utilized and that it was necessary to ensure the private sector were partners in this;

(f) Each member State nation should deal with issues of privatization of the mineral sector within the national context;

(g) Directories of specialized services and equipment sources needed to be compiled and widely distributed;

(h) Local communities needed to be integrated into mineral projects;

(i) The addition of value to mineral resources needed to be promoted;

(j) Governments needed to create an enabling environment for these actions.

70. The Committee endorsed the report subject to the inclusion of the above considerations.

Issues for an Action Plan to develop Africa's mineral industries during the period 1998-2007 through subregional and regional cooperation (Agenda item 6)

71. The Secretariat presented document ECA/DUMER/EXP.97/7 which gave an account of the major issues to be considered in formulating an action plan for the development of mineral resources during the period 1998-2007 through cooperation at the subregional and regional levels. The document pointed out that the need for an action plan stemmed from the non-implementation of various recommendations arising from previous meetings and the lack of a cohesive framework which crystallized cooperation in a step-wise manner. The document further pointed outlined that an action plan would systematize cooperation actions and provide a means for bench marking the process. It would also identify weaknesses and strengths and put the aggregate (sub)regional capacities at the disposal of all member States.

72. The report stressed the necessity for the plan to identify the growth-constraining factors particularly in the areas of institutional weaknesses, technical capacities, fiscal and regulatory environments. It was equally important to identify a set of well-targeted actions to address the constraints in a feasible, time-bound manner aligned to the objective function of cooperation. The document underscored the importance of mobilizing consensus for the action plan at the national and subregional levels. Among the key actions to be considered included those related to strengthening institutional structures and capacities, improving the regulatory environment and minimizing the effects of macroeconomic distortions through a key set of targeted incentives. The role of ECA and OAU related mainly to institutional support, capacity building and identifying best practices to underpin the action plan.

73. The document also highlighted the importance of identifying critical success factors and bench marking. Some of the success factors were identified as : the presence of a strong national commitment through programs based on consensus; strong partnerships with all stakeholders; feasibility of actions coupled with allocation of responsibilities and identifiable sources of funds; and the development of technical capacities to manage the plan. In this respect, the document proposed that a task force comprising ECA, OUA, ADB and representatives of regional economic communities be constituted to provide strategic leadership and guidance in formulating the action plan.

74. The Committee recognized that the document had highlighted the major constraints to the development of a dynamic mineral industry even though it had not provided precise actions because of the preponderant role that member States had to play in preparing a plan of action.

75. The Committee observed, however, that the report had identified the essential criteria for the success of such plans of action. Accordingly, its comprehensive framework could usefully serve as a guideline for member States to follow in preparing their national plans of action. The period 1998-2007 was seen more within the context of a vision and could not be considered obligatory since some countries already had their national plans of action while a few others had proclaimed a mining development decade.

76. Nevertheless, the Committee requested that, in preparing their plans of action, member States should consider essential elements such as the creation of enabling macroeconomic policy frameworks, the establishment of a national and subregional institutional framework and the development of small-scale mining. Similarly, it was important to demonstrate the relationship between mineral resources development and the other sectors of the economy, especially infrastructural facilities such as transport and energy. The involvement of the private sector, including the strengthening of cooperation among operators from different countries, and facilitating access of local operators to credit to strengthen their capacity to operate in the sector were all considered to be important factors.

77. ECA should play a lead role in establishing a steering and follow-up committee. In that capacity, it should conduct a periodic evaluation of progress made in the context of national plans of action for developing the mining sector. The circulation of such evaluation reports would make it easier to share information and to assist those States which had yet to prepare their plans of action.

78. The Committee adopted the report, noting that the document provided a framework of guidelines to be followed and requested the secretariat to reflect this in the title of the document.

PROCEEDINGS OF THE ENERGY SUBCOMMITTEE

79. The Secretariat introduced Document ECA/DUMER/EXP.97/2, which highlighted the recommendations adopted by the Conference of Ministers at its first session held in Accra, Ghana, in November 1995 and which revolved around four areas of concentration, namely:

(i) policies and strategies;

(iii) poverty alleviation and;

(iv) regional cooperation and integration.

80. The report focussed on five themes:

(i) Regional cooperation and integration in energy;

(ii) implementation of institutional reforms in the energy sector;

(iii) promotion of new and renewable energy sources;

(iv) energy conservation and energy efficiency programmes; and

(v) women in energy supply and utilization.

81. Activities undertaken in respect of the recommendations included the following:

(a) The ECA Conference of ministers had endorsed the Conference recommendations and incorporated them in some of the activities in the 1996-1997 work programme. The Commission subsequently undertook a review and provided support to subregional cooperation and integration projects such as the ECOWAS electricity grids interconnection study and the Kagera River Basin interconnection Programme.

(b) The various subregional communities, including SADC, COMESA, UEMOA, EAC, ECOWAS and UMA had adopted protocols for cooperation in the energy sector. The protocols contained elements which included the policy frameworks, building of capacity, electricity grid interconnections, rural electrification, and new and renewable energy sources. Special mention was made of the Southern African Power Pool, the interconnection programmes underway in North, West, Central, Eastern and Southern Africa and the regional and inter-regional transit gas and oil pipelines in the various subregions.

82. With regard to institutional reform in the energy sector, an expert group meeting had been convened to establish guidelines for natural resource development with particular emphasis on privatization and deregulation. In the area of new and renewable energy sources, the World Solar Programme, under the auspices of UNESCO, ECA's solar energy project in Benin and the UEMOA Programme, were mentioned.

83. Under the UEMOA programme for the rational use of energy, the Programme International de Soutien à la Maîtrise de l'Energie (PRISME) initiative was highlighted with reference to energy conservation and efficiency. The report further noted that ADB had taken a timely initiative in convening a training seminar on women and sustainable energy development. Inputs had been made by ECA on human resources development focussing on the scientific and technical involvement of women in this area.

84. Among the major events during the period reviewed were the convening of the World Solar Summit and the Pan-African Energy Forum. Seminars on institutional reforms, risk management in the petroleum sector in sub-saharan Africa and natural gas marketing strategies were also undertaken during the period.

85. In discussing the report, the Committee took note of the many activities underway in the sector and progress made in furthering the interconnection of energy networks. It also noted the activities of the World Renewable Energy Council (WREC) and the African Regional Energy Policy Network (AFREPREN). With respect to the various energy programmes, the meeting recommended that they should urgently be harmonized to avoid wastage of resources. The committee observed that the proposed African Energy Commission would provide the necessary coordinating framework for the harmonization and rationalization of energy programmes in Africa when it was operational.

86. The Committee noted that the overwhelming majority of African States had adopted energy policies with emphasis on privatization and deregulation. It recommended exchanges of experiences in BOO, BOOT and ROT (Rehabilitate, Operate and Transfer) activities, as well as in public/private partnerships. It was observed that the issue was not privatization but competitiveness and this could be achieved in various ways, even where governments had chosen not to privatize.

87. The Committee noted with concern the predominance of biomass in Africa's energy consumption and cautioned against the negative effect this could have on the physical environment. To this end, it was stressed that the impact on the environment had to be given due attention in the implementation of energy policies and programmes.

88. The Committee emphasized the need to promote the exchange of information among African countries by all means including the creation of a regional information network and the use of Internet where available.

89. The Committee further urged African countries to adopt an integrated approach in designing energy policies and programmes, taking into account contributions expected from all energy subsectors so as to plan for adequate infrastructures. Various delegates gave accounts of activities and programmes underway in their respective countries.

90. The meeting endorsed the report and urged the ECA to sharpen future reports so as to closely monitor developments in the African energy sector and provide comprehensive up to date comprehensive information on the situation. Recommendations on action plans also required dates and the organizations responsible for implementing the actions.

91. The Secretariat presented document ECA/DUMER/EXP.97/4 which described the role of Governments in Strengthening Cooperation at the Subregional and Regional levels for the development of energy resources in Africa.

92. The report pointed out that the role of governments should be seen in terms of:

93. The roles of intergovernmental bodies such as ADB, ECA, OAU, and the various subregional groupings in energy development revolved around institutional development, such as the establishment of the African Energy Commission, capacity building, and resource mobilization to fund projects and programmes.

94. The report gave detailed examples of achievements in energy cooperation. These included:

(a) joint development of energy resources between countries sharing boundaries or belonging to the same regional economic subgrouping. Examples of this included the Manantali hydropower development project in Mali to supply electricity to Mauritania, Mali and Senegal; the Nangbeto hydropower development project in Togo; the installation of a third turbine at Ruzizi II and the planned Ruzizi III hydropower project between Rwanda, Burundi and the Democratic Republic of Congo; and the Mpanda Uncua hydropower development project downstream from the Cabora Bassa power station in Mozambique which will supply power to South Africa;

(b) cooperation agreements between national electricity companies for the interconnection of their energy networks. Some of the programmes were at the feasibility stage such as the electrical interconnections between Ghana and Burkina Faso, and the envisaged construction of a gas pipeline to link Nigeria, Ghana, Benin, Togo, Côte d"Ivoire and other landlocked countries in West Africa. Many other programmes were, however, operational such as the electrical interconnections of the Southern African Power Pool (SAPP) in the SADC region;

(c) transit agreements for the export/import of petroleum and natural-gas products between countries. This was typified by the agreement for the export of Algerian natural gas to Spain, via Morocco through Gazoduc Maghreb-Europe (GME) and the pipeline between Chad and the Cameroon to export Chadian petroleum products.

95. The report also noted the roles of the Union of Producers, Conveyors and Distributors of Electricity in Africa (UPDEA), the Association of Petroleum Producers in Africa (APPA) and the World Energy Council in providing efficient frameworks for cooperation in capacity building, facilitating the financing of African energy projects and articulating joint positions. The report further noted the role of AFRA in the building of laboratory facilities and developing skills for their maintenance in the area of nuclear energy.

96. The Committee reviewed the impediments to regional cooperation and called for openness among African countries with regard to energy policies and programmes, and supply/demand information. The African countries were further urged to intensify intra-regional cooperation in energy trade and in the mobilization of domestic funding for national and multi-country projects. The need to adopt common standards was stressed as well as the impact of this on the rationalization of infrastructure and imports of equipment.

97. Intra-regional cooperation in human resources development as part of the capacity building process should receive urgent attention. To this end, the "Ecole Supérieure Inter-Africaine d' Electricité (ESIE)", a bilingual institution, was cited as worth supporting and expanding. Intra-regional cooperation in the manufacturing of electrical equipment with a sufficient economy of scale was also an area requiring the immediate attention of African countries. UNIDO is requested to assist in this area.

98. The Committee emphasized the need for African countries to promote rural electrification as it contributed to poverty alleviation and lessening of the burden of the African woman. To this end, new and renewable energy sources should be tapped. ECA's project for the electrification of a village in Benin was noteworthy and its results were awaited for replication in other villages.

99. The Committee also discussed the financing of energy projects. Countries were urged to establish mechanisms for the mobilization of domestic resources. Energy funds, mostly in the form of a levy or taxes on oil or electricity, existed in some countries and were worth replicating. Regional and subregional organizations were urged to support country initiatives and to pool funds to assist poor countries which were unable to develop energy resources.

100. The Committee emphasized that promoting regional cooperation in the energy sector was the prime responsibility of governments who were urged to:

(a) define a clear framework for subregional cooperation;

(b) identify energy projects that could promote regional cooperation and integration and include these in national energy development plans;

(c) request regional development financing institutions to put in place innovative mechanisms for financing energy projects through the creation of special schemes;

(d) strengthen the technical and financial capacities of subregional institutions to enable them identify and monitor energy projects;

(e) review investment codes to introduce appropriate incentives to attract private-sector investment in electricity production and fossil-fuel exploration;

(f) establish a database on energy resources and investment opportunities, and ensure its accessibility to all interested parties, especially investors;

(g) strengthen local capacities through the fuller use of existing (sub)regional research and training institutions and the establishment of others;

(h) exchange of experiences to ensure the optimum utilization of the African capacities for which a computer database should be established;

(i) promote the transfer of technology and encourage research in technology development.

101. The Committee endorsed the report.

102. The Secretariat presented document ECA/DUMER/EXP.97/6 entitled "The Role of the private sector and other development actors in strengthening subregional and regional cooperation in the development and utilization of energy resources in Africa". The document highlighted the major issues relating to regional cooperation and energy development including the dominant role the state played in the energy sector, the abundance of Africa's energy resources, the marginal role played to-date by the private sector in the development and utilization of the continent's energy resources and the absence of a conducive and enabling environment for investment in the energy sector by the private sector.

103. The report observed that although Africa was endowed with abundant primary energy resources, these were still underdeveloped due to capital, technological and human resources limitations. Furthermore, it was noted that there was uneven distribution of the resources within the region. The report observed that the solution to these constraints was for African States to cooperate at the subregional and regional levels.

104. The Committee noted that although the private sector was becoming an active player in the energy sector, their contribution, and that of other related actors to the implementation of subregional and regional energy projects had remained insignificant. The Committee urged African States to develop a clear and comprehensive policy framework for subregional and regional cooperation through private sector initiatives to develop energy resources.

105. It further recommended that African regional financing institutions should establish specific energy financing windows to finance subregional and regional energy projects. There was a need to also encourage indigenous private sector financing for energy projects. The Committee also requested African states to strengthen existing subregional and regional organizations and give them the necessary mandate to identify and implement regional energy projects. It urged African States to create conducive conditions and an enabling environment to facilitate the full participation of both the local and foreign private sector in financing regional and subregional energy projects.

106. African private banks and financial institutions were called upon to invest in subregional and regional energy projects as a priority. It was recommended that African Chambers of Commerce should actively promote subregional and regional energy projects and assist in the mobilization of financial resources for projects.

107. The Committee underlined the need for multilateral and bilateral financial institutions to give priority to financing subregional and regional energy projects and take into account the regional dimension of structural adjustment programmes on subregional and regional cooperation.

108. The Committee endorsed the report.

109. The Committee considered the presentations made by the African Development Bank (ADB), the World Energy Council (WEC), the Organization of African Unity (OAU/AEC) and other subregional economic groupings, namely the Southern African Development Community (SADC) and the Union Economique et Monétaire Ouest-Africaine (UEMOA).

(a) ADB African Energy Programme

110. The Committee considered the document ECA/RCID/EXP. 97/INF.20 on "Findings and Recommendations of the ADB African Energy Programme" which outlined the status of implementation of the ADB energy programme. It noted that phases I and II of the programme, which had commenced in May 1992, would soon be completed and a meeting of experts was planned to disseminate the outputs of the programme. It further noted the development and availability of energy databases and energy planning tools and looked forward to their dissemination to member States and subregional groupings.

111. The Committee also noted that the output of its meeting would constitute a set of recommendations to the Bank and other donors with respect to their contribution towards resolving Africa's energy challenges. In this connection, the Committee urged the Africa Development Bank to allocate adequate resources for the completion of the planning of the African Energy Programme (AEP) and to give due priority to regional/subregional energy projects in its lending portfolio.

(b) WEC Africa Energy Programme

112. The Committee considered the documents ECA/RCID/EXP.97/INF.22 on the WEC African Energy Programme and ECA/RCID/Exp.97/INF.23 on the WEC Energy Facilitation Programme. It noted that the WEC Africa Energy Programme was established to operate alongside efforts to create the African Energy Commission (AFREC). The programme worked in a facilitation capacity towards the coordinated and interdependent development of African energy supplies.

113. The Committee observed that the WEC African Energy Programme planned to organize expert group meetings and Regional African Energy Fora in conjunction with Economic Communities (RECs) such as SADC, ECOWAS, COMESA, UEMOA and African regional institutions such as ECA, OAU and ADB.

114. The Committee further noted that the main objectives of the WEC Energy Facilitation Programme were:

115. The Committee observed that the WEC Energy Facilitation Programme was committed to assist establishing the African Energy Commission and that it was planning to co-organize an Expert Group Meeting on Facilitating African Energy Projects with ECA in June 1998.

(c) Southern African Development Community (SADC)

116. The Committee was informed that SADC was formed in 1980 and that each SADC country was allocated a specific sector. Angola was given the responsibility to coordinate the SADC energy sector and in this regard a Technical and Administrative Unit (TAU) was established with its headquarters in Angola. Since then SADC had prepared policies and strategies for cooperation in the energy sector. In addition an energy protocol had been signed encompassing the establishment of a SADC Energy Commission while a SADC Power Pool had been made operational.

(d) Community Energy Programme of the UEMOA

117. The Committee considered document ECA/RCID/EXP.97/INF.14 outlining the programme "Programme énergétique conmunautaire de l'UEMOA" adopted by the UEMOA Council of Energy Ministers in April 1997.

118. The Areas of focus of the UEMOA Programme included:

(iii) cooperation in the joint importation of petroleum products.

119. The Committee noted UEMOA's resolve to harmonize and coordinate its energy programmes with those of ECOWAS and other subregional organizations and to forge close cooperation with ADB, ECA and OAU.

(e) United Nations Industrial development Organization (UNIDO).

120 The Committee noted that UNIDO through its technical cooperation programme in Africa had supported a number of initiatives at the policy, institutional and enterprise level focusing on the manufacture of renewable energy supply equipment, conservation and improving industrial energy end use, increasing efficiency of present biomass use and introduction of cleaner technologies. The Committee expressed its appreciation for this support to African countries. Appropriate inputs were requested by UNIDO in the development of this programme.

OAU/AEC African Energy Commission (agenda item 6.2)

121. The Committee considered the document (ECA/RCID/EXP.97/INF.7) prepared by the Organization of African Unity on the "Preliminary Findings and Recommendations of the pre-feasibility study on the Establishment of the African Energy Commission". It noted that the African Energy Commission Project stemmed from the need to design and implement policies and strategies for cooperation in energy development in a coordinated manner. The project would be established initially and provisionally as a loose body serviced by the existing institutional structures in OAU/AEC, ECA, ADB and the regional economic communities.

122. The Committee also noted that the role of the African Energy Commission should be to promote solidarity of action among the AEC member States and other stakeholders by coordinating and harmonizing their energy activities. This would enhance the exploitation and development of their energy resources for the industrial and socio-economic development of African continent.

123. The Committee urged the OAU/AEC secretariat to accelerate the completion of the feasibility study to determine the budgetary implications of establishing the African Energy Commission and its activities. An action plan for the Commission should be developed giving due consideration to the Commission's role and structure in the short term (July 1998 - January 2000) and the longer term structure thereafter. The action plan should stress the coordinating role of AFREC.

124 The Committee further urged the OAU Study Team to consult ECA, ADB, the various subregional economic groupings and other relevant institutions in the process of completing the study. The final report should be circulated to all member States for comments prior to presentation to the Sixty-fifth Ordinary Session of the Council of Ministers of the Organization of African Unity in June 1998 for the Councils final decision to establish the Commission.

125. The Committee noted the offer by Egypt to host the Secretariat of the AFREC.

Any other business (agenda item 7)

126. The Secretariat informed the Committee that following the decision of the ECA Conference of Ministers in May 1997 to restructure the ECA intergovernmental machinery, the Conference of African Ministers Responsible for the Development and Utilization of mineral resources and energy had been substituted by the Technical Expert Group Meeting on Natural Resources, Science and Technology. The secretariat further explained that whenever need arose, a special session of the Conference of African Ministers responsible for the development of mineral resources and energy would be convened. The Committee was also informed that this decision was in line with the recently instituted OAU/AEC Technical Committee of Experts incorporating minerals and energy in which ministers would participate.

Consideration and adoption of the report and recommendations of the Technical Preparatory Committee (agenda item 8)

127. The Committee considered this report and recommendations and adopted them with amendments which have been incorporated.

Provisional agenda of the Ministerial Meeting (agenda item 9)

128. The Committee proposed the following agenda for the Conference of Ministers:

1. Opening of the Conference;

2. Election of Officers;

3. Adoption of the agenda and organization of work;

5. Any other business;

6. Informal business meetings;

7. Forum to discuss the challenges posed by the Confernce theme;

9. Closure of the Conference.

Closure of the meeting (agenda item 10)

129. In his closing remarks, the Chairman of the Preparatory Committee thanked the Secretariat, the Committee members and the Bureau for their cooperation and contribution to the success of the meeting.

Summary of Recommendations of the second Meeting of the Technical Preparatory Committee to the Regional Conference of African Ministers Responsible for the Development and Utilization of Mineral and Energy Resources

A. Mineral Resources

The Technical Preparatory Committee on Mineral Resources:

Having reviewed in detail the theme of the Conference which aimed at strengthening cooperation among development actors to promote the sustainable development and utilization of mineral resources in Africa;

Appreciating the role of Governments in strengthening cooperation by addressing weaknesses in the various/intergovernmental institutional structures and mechanisms for cooperation;

Recognizing the important role the private sector, in its various forms, and the multilateral agencies play in mineral resources development in the African continent;

Noting that the potential role of the private sector and the other development actors could be expanded to provide for more effective partnerships to drive the process of cooperation;

Taking into account the usefulness of having a long-term view of improving the development of mineral resources through cooperation;

Recognizing the negative impact of minerals industries on the environment and the safety and health of humans, as well as the need for rational and sustainable development of mineral resources;

Recognizing the critical role women could play in the development of mineral resources, especially in small-scale mining;

Deeply aware of the overriding need to strengthen and harmonize mechanisms for cooperation and promote the whole African continent as an ideal destination for increased investment in its mining sector;

Hereby recommends the following actions, under the indicated sub-themes:

To improve the rate of implementation of the recommendations of the Conferences:

To improve concensus-building:

To improve institutional structures and mechanisms for cooperation in mineral resources development:

To provide a long term development framework for mineral industries in Africa:

The Technical Preparatory Committee of the energy subsector:

Taking into account that the African continent is endowed with abundant fossils, new and renewable energy resources which are unevenly distributed and tapped. Taking further into account that the development of these resources requires huge capital investment which is beyond the capability of individual African states;

Considering that energy resources overlap national boundaries which calls for collaboration and coordination between the parties concerned;

Recognizing the role that governments could play in mobilizing resources for the development of the energy sector as an engine of economic growth for sustainable development;

Aware of the negative impact of energy production and consumption on the environment and the need for energy efficiency and conservation.

Recognizing the critical role of private investment in the development of the energy sector;

Recognizing further the vital role women play in the production and consumption of energy;

Aware of the need to strengthen and harmonize mechanisms for cooperation and promoting increased investment flows in the African energy sector.

Hereby recommends the following measures :-

ANNEX III

REPORT OF THE COPPER INDUSTRY EXPERTS MEETING ON

THE PROSPECTS FOR INCREASED PRODUCTION AND

INTRA-AFRICAN TRADE IN COPPER METATL AND

COPPER-BASED PRODUCTS

DURBAN, SOUTH AFRICA, 20 NOVEMEBRE, 1997

BACKGROUND

        1. Africa contains over 17.6 per cent of the world's copper reserves and in some countries, notably the Democratic Republic of Congo and Zambia, the copper mining industry has a long history. Despite this, there has been no major intra-African trade in copper products. The products are exported mostly to developed market economies as intermediate products or refined copper metal. This situation attracted the attention of the Regional Conference of Ministers Responsible for the Development and Utilisation of Mineral Resources in Africa which debated the issue at both the second (1985) and third (1988) sessions. The Ministers recommended that a study be undertaken to identify factors which would contribute to increased production and intra-African trade in copper-based products.

2. The study was subsequently undertaken in 1994 by ECA and UNIDO with the collaboration of Mintek of South Africa. A major recommendation of the study was that a meeting should be held between the core countries, comprising copper producers and fabricators, and the significant African consumers, to discuss the findings of the report. The first Regional Conference of African Ministers Responsible for the Development and Utilisation of Minerals and Energy Resources, held in Ghana, in 1995 noted the recommendation and urged that the meeting be held as soon as possible. However, due to financial constraints and a venue, the meeting could not be held.

3. The meeting was subsequently held during the Durban Regional Conference of African Ministers Responsible for the Development and Utilisation of Mineral and Energy Resources held during the period 17 - 22 November, 1997.

ATTENDANCE AND ORGANISATION OF WORK

4. The meeting was attended by the following African member States: Burkina Faso, the Democratic Republic of Congo, Mauritania, Namibia, South Africa, Zambia and Zimbabwe. Thus all the major copper producing and fabricating countries attended the meeting.

5. The meeting was also attended by the following intergovernmental, international, public and private sector organisations: Commission de l'Union Economique and Monétaire Ouest Africaine (UEMOA), Copper Development Association, Minerals Bureau, Mintek, Societe Nationale d'Electricite de la République Démocratique du Congo and UNIDO. A full list of participants is given at the end of the report.

6. The meeting was chaired by Zambia. It was organised around a panel of experts who comprised: ECA, UNIDO, Copper Development Association and Mintek. The panel of experts generally guided the meeting with opinions on specific issues raised by the meeting.

7. The meeting was guided by the following agenda:

PROCEEDINGS OF THE MEETING

Introductory remarks by ECA (Agenda item 1)

8. A representative of ECA gave the background to the meeting. He explained that the study on the "Prospects for the Increased Production of and Intra-African Trade in Copper Metal and Copper-Based Products" had undertaken an extensive review of many African countries from the viewpoint of copper production, fabrication, consumption as well as the influence of current developments on these factors. He outlined the major objective of the meeting as to review the recommendations made by the study and determine the feasibility of their implementation. Thus, he explained the main outcome of the meeting as consisting of recommended actions with clearly spelled procedures for their follow-up.

Presentation of the report on Prospects for the Increased Production of and Intra-African Trade in Copper Metal and Copper-Based Products, ECA/UNIDO/AFRICOP/TP/2/94 (Agenda item2)

9. A representative of Mintek presented the report ECA/UNIDO/AFRICOP/TP/2/94 on the Prospects for the Increased Production of and Intra-African Trade in Copper Metal and Copper-Based Products.

10. The report reviewed the global aspects of copper production. He indicated that world mine production of copper was about 9.1 million tons while that including non-primary sources was about 10.8 million tons. Africa contributed some 10.6 per cent and 6.4 per cent, respectively to these figures. The bulk of this, comprising 93 per cent came from South Africa, the Democratic Republic of Congo and Zambia. Other than the three countries, producing mines were located in Botswana, Morocco, Namibia and Zimbabwe. Mine production had been declining from a peak of 1.52 million tons in 1974 to about 750,000 in 1993. This had largely been due to management problems and shortages of foreign exchange in the State-dominated copper industries of the Democratic Republic of Congo and Zambia.

11. The report further outlined that production of refined primary copper was only undertaken in the SADC countries of the Democratic Republic of Congo, Namibia, South Africa, Zambia and Zimbabwe. The major fabrication facilities were located in South Africa, Egypt, Zambia and Zimbabwe. Fabrication facilities for the domestic market could also be found in Algeria, Cameroon, Kenya, Nigeria, Morocco, Tanzania and the Democratic Republic of Congo. Generally, fabrication facilities were constrained by limited finance and foundry skills.

12. Turning to consumption, the report said that the major areas of consumption by end-use were electrical and electronic applications, the building and construction sector, industrial machinery, consumer products and transport equipment, in that order. The average annual copper consumption in Africa was 92.7 Kt, with 63.9 Kt consumed in South Africa alone. This represented an African consumption per capita of some 0.3 kg, excluding South Africa, while developed economies exhibited a high consumption rate of 8.7 kg per person.

13. By and large, per capita consumption had been rising in both the developed and developing world although the intensity of use, defined as consumption per unit of GDP, had continued to decline in developed countries as a result of substitution, miniaturisation and other factors. While the price of primary copper was at times volatile, that of higher value-added manufactured products fluctuated much less and often kept pace with inflation.

14. Intra-African trade in copper products was small, although some copper metal and semi-manufactures were traded especially in eastern, southern and northern Africa. Some of the factors which limited consumption and trade were poor sea transportation, slow rail transportation, expensive road transportation and tariff barriers. However, infrastructural growth, including electrification schemes, interconnection of electrical grids, increased construction of permanent housing and strong donor support for energy projects could all enhance the consumption of copper in Africa. Other equally important factors included the improvement of policy incentives to encourage increased privatisation bearing in mind the need to achieve this at minimum social and economic hardships.

15. The report pointed out that the base metal smelters in the SADC region emitted a total of 1 million tons of sulphur dioxide to the atmosphere annually and contributed to a significant increase in acidity levels of water and soils. These gases could be converted into sulphuric acid for use but shortages of foreign currency to procure equipment hampered this. In respect of small scale mining, the report pointed out that copper mining, processing and fabrication was amenable to small scale methods. This could broaden the range of products and inter-African trade in copper products.

16. Taking into account the limited distribution of copper production facilities in Africa, the looming deficits in Egypt and South Africa and the wide distribution of copper consumption centres in Africa, the potential for increasing inter-African trade in copper products was high. This potential could be improved by product standardisation, improving transport links, removal of trade barriers and increased cross-border investment. Furthermore, there were a number of African countries with a high growth potential in terms of high populations, vigorous building and electrification programmes and infrastructural expansion. These countries, which included Algeria, Cote d'Ivoire, Ethiopia, Kenya and Morocco added to potential consumption.

17. The report concluded that an African Copper Development Association, comprising copper producers and fabricators, major consumers, policy makers and the private sector, should be formed to promote the production and use of copper in Africa. Where possible, national and (sub)regional associations, especially in the Democratic Republic of Congo and Zambia, the two largest producers, should be considered. The copper development associations could be driven by professional associations, including chambers of mines, through the existing intergovernmental machinery. The report further concluded that a meeting of core countries, including Morocco, Nigeria, South Africa, the Democratic Republic of Congo, Zambia and Zimbabwe should be held to review the findings of the study. The meeting should consist of representatives of governments, the public and private sector and other interested parties.

Discussion of the recommendations of the report on Prospects for the Increased Production of and Intra-African Trade in Copper Metal and Copper-Based Products, ECA/UNIDO/AFRICOP/TP/2/94 (Agenda item 3)

18. The meeting devoted much time to discussing the major recommendation that an African Copper Development Association should be formed. Aspects of the discussions included:

19. The meeting noted, however, that a regional association could precipitate growth in the copper industry as for example had happened in Chile where a similar association had been established. The meeting noted that generally such associations supported industry research, created consumer awareness and promoted trade. However, they did not automatically lead to increased consumption, which was a product of broad growth of the national economy.

20. The meeting discussed the funding mechanism for the proposed regional copper association. It noted that the World Copper Development Association obtained a levy from copper producers world wide and there was a possibility of the regional association obtaining funding from the world body. Generally such associations were not funded by Governments but by industries they served.

Recommendations of the meeting and mechanisms for implementation (Agenda item 4)

21. The meeting made the following recommendations:

Any Other Business (Agenda item 5)

22. There was no other business discussed by the meeting

LIST OF PARTICIPANTS TO THE COPPER MEETING

Member States

Democratic Republic of Congo

Mauritania

Namibia

South Africa

Zambia

Zimbabwe

Organisations

Commission Nationale de l'Energie

9. M. E. Liendi Lombili, Chef de Département adjoint, Commission Nationale de l'Energie, B.P. 8053, Kinshasa-Gombe, République Démocratique du Congo

Commission de l'Union Economique et Monétaire Ouest Africaine

Copper Development Association

11. Mr. Alistair Peterkin, Copper Development Association, South Africa

Mintek

12. Dr. M.A. Ford, MINTEK, Tel. 011 709 4111/2, South Africa

Société Nationale d'électricité

UNECA

UNIDO

ANNEX IV

LIST OF DOCUMENTS

ANNEX V

LIST OF PARTICIPANTS