Africa News blog

Australia worse than Africa for mining? Yikes!: Clyde

By Clyde Russell The idea that Australia is a more dangerous place for mining investment than Mali might seem strange to most observers, but that’s exactly the view of the boss of the world’s third-biggest gold producer. Mark Cutifani, the chief executive officer of AngloGold Ashanti, said last week he was more concerned about government policies toward mining in Australia than about nationalism in Africa. On the face of it, this is an extraordinary comment that has gone largely unreported by both the Australian and international media. How can it possibly be that Australia, a stable Western democracy with rule of law, independent courts and a culture of vigorous debate, is a more risky place than countries like Mali, which had a military coup last month and is battling an insurgency by Tuareg separatists? Of course, it may be that Cutifani, an Australian-born mining engineer who has headed the Johannesburg-based company since October 2007, was ramping up the rhetoric to make a point when he talked to reporters on March 27 in Perth, capital of the resource-rich state of Western Australia. But this would appear to be at odds with his previous record of speaking sensibly about the gold-mining industry while remaining an advocate of the interests of his global company. The point Cutifani was probably trying to drive home is that the debate in Australia over its vast mineral resources appears to have veered off-track and descended into political point-scoring. “The politicians and we as industry leaders are missing each other,” the Australian Associated Press quoted him as saying. “Somehow, we’ve got to land this discussion and stop the class warfare-type conversations and turn the conversations into constructive dialogue about the future of the country and the industry.” To be fair, Cutifani has also lobbied against proposals for a resource rent tax in South Africa and moves to raise taxes in other African countries where AngloGold operates, such as Ghana and Mali. But for Australia, the background to his comments is an intensifying war of words between Wayne Swan, the treasurer in the Labor Party-led minority government, and mining magnates over the new Mineral Resource Rent Tax (MRRT) and the carbon tax. Both these taxes are due to start on July 1 and have raised the ire of many industries and the opposition Liberal Party.

The MRRT will impose a 30 percent levy on so-called super profits of large coal and iron ore, and doesn’t yet include other producers such as gold miners. The carbon tax will impose a price of A$23 on the emissions of the top 500 polluters, to be phased in, while reducing income taxes for poorer households in order to offset the expected increase in energy costs. The Labor Party, which has slumped in opinion polls partly over public disquiet over the new taxes and a broken promise not to introduce a carbon tax by Prime Minister Julia Gillard, appears to be following the tactic of stoking the politics of envy as a distraction method. Since the financial crisis that sparked the global recession in 2008 it has been easy for politicians to attack the rich and blame untrammeled greed for the economic carnage. In Australia, the target is billionaire mining barons and Swan attacked iron ore magnates Gina Rinehart and Andrew Forrest as well as coal developer Clive Palmer in an essay published last month. Interestingly enough, Swan didn’t attack BHP Billiton and Rio Tinto, the two global miners that led initial opposition to a stiffer resource tax that was watered down after Gillard deposed former prime minister Kevin Rudd in a party-room coup. Swan accused the billionaires of trying to use their wealth to “distort public policy,” apparently without any sense of irony, given that he was using his position as the second-most powerful politician in Australia to do the same. It seems to me that Australia would benefit from a more sensible debate on how to ensure the mineral wealth is developed in a way that rewards the owners of capital that take the risks of developing projects as well the overall economy and citizens in general. Debate in Australia appears to be driven by short-term political cycles, with federal elections every three years leading politicians to focus more on spin than sound policies. Is the MRRT the best design that could have been implemented? Will it raise sufficient revenue without leading to less investment, and will it help ensure the long-term viability of mining? Should the revenue it raises be used to fund a one percentage point cut in the company tax rate, as Labor proposes, or would it be better put toward building a sovereign wealth fund? These are all valid points for debate, but aren’t getting a hearing in Australia currently. Instead, as AngloGold’s Cutifani pointed out, there is an unedifying mud-slinging match that does little to enhance the reputations of either Swan or his targets.

Motor-rickshaws changing face of transport in Mali

Mali introduced Chinese-made motor rickshaws in 2006. They’ve been such a hit that most of Mali’s bigger cities are overrun with them and competition between drivers is pushing down prices. They’ve now been barred from the centre of the capital, Bamako, but in Mali’s third-largest city, Segou, the rickshaw-taxi is the main means of public transport.

“I have a wife and seven children,” rickshaw driver Bassidi Baba Djefaga told Reuters Africa Journal. “This rickshaw is what enables me to feed my family. Before I had the rickshaw, I was a taxi driver and had two taxis. But when the new rickshaws arrived, I saw that taxi cars weren’t going to be good business any longer. So, I sold my two taxis and bought a rickshaw.”

Bassidi was one of the first drivers in Segou to buy a motor rickshaw, and it paid off. He can now make around $300 a month — a lot more than the average income in Mali, which is around $130.

The rickshaws are a government initiative to create employment and improve transport. Mali’s minister for transport introduced them in 2006 after a visit to China, where motor rickshaws are widely used.

In Mali, drivers buy them from the government for about $2000 and pay for them in instalments over 20 months.

For the people of Segou, the motor rickshaws have revolutionised transport. Before, the only options were taking a donkey cart or an ordinary taxi, which can cost up to 50 cents per trip within Segou. In a motor-rickshaw the same journey costs 10 cents.

No place like home

If there really is no place like home, then for many Africans in France the Chateau-Rouge neighbourhood of Paris is the next best thing.

At the open air market fish and vegetable vendors sell produce that reminds their African customers what they are missing.

Aurelie Robert owns a store called Togo Exotique. She came to France when she was 16 years old.

“The majority of my produce comes from Togo, Ivory Coast and Cameroon but I also get some supplies from wholesalers,” she said. “My customers are happy because here they can find fresh produce from Africa and they can eat the food they miss from back home.”

Alassane Camara from Ivory Coast works at Togo Exotique. When he came to Paris 11 yearsago, he came straight to Chateau-Rouge. He knew it wouldn’t be hard to find work, and he could relate to people.

“Honestly, it helps when you’re abroad and you meet people from your community. They’re in the best place to give you advice on what you should do, where you should go. It makes you feel good. This is a friendly neighbourhood. I’m Ivorian, and if I meet a Senegalese, a Guinean or a Malian, it’s as if we were from the same country. We’ve all left Africa for another land, so when we meet it’s as if we knew each other.”

Alassane often comes to Chateau-Rouge to hang out. Though he is comfortable living in France he told Reuters Africa Journal how he dreams of the day he will return to Ivory Coast.

Can shea nuts help the women of Mali?

By Rainer Schwenzfeier

How can African countries earn more from their raw materials. And how can the women of Mali improve their ability to trade with buyers in the West?

Korotouma Doumbia, a 29-year-old from south-west Mali, has no education or formal skills but she manages to earn the family income. She harvests shea nuts and turns them into shea butter, a popular ingredient in many western cosmetics.

The shea tree grows wild in nearly 20 countries in Africa and Mali has more shea trees than any of its neighbours. They are often cultivated for their oil and Korotouma’s village has some planted trees, but they also harvest the wild trees further from the village. 

“The trees belong to all of us, because nobody has planted them. All the women from the village can harvest wherever they like,” she told Reuters Africa Journal.

The women collect as much as they can carry. But about two thirds of Mali’s shea harvest stays on the ground. The trees are spread out and the women have no other means of transporting their harvest than carrying it on their heads.

One organisation that has tried to help Mali’s women earn more from their shea butter is the Development Trust Association or ACOD, a non-governmental group based in Bamako.

Hu reassures Africa?

If anyone in Africa was worried that the global financial crisis might dim China’s interest in the continent, President Hu Jintao will be visiting this week to give some reassurances – as well as possibly to temper any unrealistic hopes for the amount of assistance to be expected.

As Chris Buckley reported from Beijing, this visit is also about China showing the wider world that it is a responsible power.

The fact that none of the countries Hu will visit is among Africa’s economic or resource heavyweights – Mali, Senegal, Tanzania and Mauritius – is seen as a sign that China wants to send a message that its engagement with Africa is about much more than resources.

Trade between China and Africa rose to $107 billion last year and more deals are expected on this visit. Nearly all of Africa’s exports to China still come from a handful of countries rich in oil or minerals, though, and now the global downturn has put those in more doubt.

China’s involvement in Africa is a subject we looked at recently. Alistair Thomson in Dakar found that even if some Chinese investments in Africa were losing their lustre, many Chinese firms were taking a longer-term view to pursue strategic expansion – and some were hunting for bargains. For China, Africa also offers an important destination for exports, as any visit to even the most remote African marketplace will quickly show.

Growing trade relations with China were one of the things seen by Zambian economist Dambisa Moyo in a previous blog post as a way for Africa to emerge better off from the financial crisis and less dependent on Western aid.

But China’s involvement in Africa has brought concern from some in the West – quite apart from those who may stand to lose out on the business front – with some critics saying Beijing’s interest is too focused on the drive to secure resources and pays little heed to the kind of thing that Western donors say they want to promote, such as elections, human rights and the fight against corruption.