Africa Set To Strip Western Giants Of Mining Rights

Africa set to strip Western giants of mining rights

Nick Mathiason, The Observer (UK)

28th January 2007

African governments are gearing up to seize back valuable mining concessions from the global extractive giants.

Angry at missing out on the unprecedented commodity boom, Tanzania is preparing to renegotiate gold mining concessions. The news will send a shiver down the collective spine of some of the world's biggest mining companies, whose profits and share prices have surged in the past five years.

The warning comes from Dr Yash Tandon, executive director of the South Centre, the inter-governmental body representing 49 developing countries.

Asked if African governments would follow the lead of Russia's President Vladimir Putin and appropriate valuable commodity assets, Tandon said:

'It's a matter of time ... within the next five years or even earlier. 'To some extent, African countries have been a victim of the myth that, if they don't open up their markets to investment, it won't come. They have been competing to give concessions to mining firms and banks. I don't believe the Tanzanians get more than 5 per cent of gold. The rest is externalised.'

In an interview with The Observer at the World Social Forum in Nairobi, Tandon criticised the Make Poverty History campaign as little more than a 'PR exercise', saying: 'Gleneagles [the G8 summit] wrote off $40bn. At the time, debt was about $400bn for poor countries. You still have $350bn debt. Just the interest rate alone by now has brought that back to $400bn - so on debt relief it hasn't made much difference, because the underlying structure that creates debt is not settled, resolved or even addressed.

'If this becomes the last step, they will have indulged themselves in some kind of public relations exercise which gives the impression they've done their job.'

He is advocating a debt audit to determine whether poor countries' debt relief had a 'meaningful impact', or whether money has been recycled. He suspects that lucrative infrastructure contracts have been linked to debt relief.

Despite Tony Blair's optimism, Tandon believes WTO trade talks are 'more or less doomed'. He says EU pressure to seal an economic partnership agreement with African, Caribbean and Pacific nations by the year's end is 'unrealistic and unfair' because the original intention was to wait until two years after the conclusion of a WTO trade deal.