FINANCE FORUM •
IMPROVING MINING INFRASTRUCTURE FOR ECONOMIC GROWTH
By Nomsa Mbere and Rita Spalding , partners at Webber Wentzel
Infrastructure is a bellwether of a country ’ s potential for economic growth . Governments that spend on infrastructure give themselves the best chance to succeed , while underinvestment restrains inclusive economic prosperity . Mining is directly impacted by a country ’ s infrastructure and ability to move mine product , key equipment , materials and goods from source to market . 1
Many African states are visceral examples of these maxims . Many have failed to improve or maintain infrastructure to match population growth rates and economic needs . Growing populations and other demands have stretched the public fiscus , making it increasingly difficult to the point of being unaffordable for governments to solely fund infrastructure .
For the continent to grow , it must address the problems facing infrastructure development and develop the necessary legal structures , regulatory frameworks and financing mechanisms to bridge Africa ’ s infrastructure gap .
Africa ’ s infrastructure deficit , its connection to mining The scale of the challenge facing infrastructure development across Africa ’ s different markets is stark . While the mining sector has , in many respects , helped to develop key infrastructure in markets ranging from South Africa 2 to the Democratic Republic of the Congo ( DRC ) and Zambia , 3 this infrastructure is often purpose-built and does not support the wider economy .
According to the African Development Bank , 4 the continent must invest between USD130- and USD170-billion annually in infrastructure development to close its infrastructure gap . However , investment has only ranged between USD68-billion and USD108- billion annually in the last few years . Approximately two-thirds of the continent ’ s people have road access , with transport costs often double compared to other developing markets . Only 30 % 4of Africa ’ s population has regular access to electricity , with water and internet access below 10 %. 5
Beyond physical infrastructure , regulatory and legal red tape , and corruption continue to hobble policy efforts , 6 with Transnet ’ s woes in South Africa and the continued delay of the Simandou iron ore project in Guinea endemic of such instability . For countries that depend heavily on mining as a percentage of exports , like Guinea ( 87 %), Mali ( 85 %), Zambia ( 79 %), and the DRC ( 77 %); infrastructure gaps and delays can prove terminal to efforts to develop their wider economies . 7
Red tape – its ability to stop infrastructure development at the concept The scale of the challenge facing Africa ’ s economies and mining sectors highlights the need for a globally competitive infrastructure platform that can enhance mining sector growth continentwide . Getting there means addressing the legal problems that inhibit infrastructure developments at the source .
These challenges include poorly drafted legislation , the inconsistent application of law and policy , a lack of policy certainty and changes in the regulatory environment ranging from ministerial appointments to key leaders of regulatory bodies .
The above categories alone can drive up the cost of infrastructure development significantly , with time a casualty as much as capital . Governments must ensure the correct policies , regulations and legal structures are in place and enforced to support the development of infrastructure , vital to the long-term prospects of the mining industry .
All images supplied by Webber Wentzel
Nomsa Mbere , partner at Webber Wentzel
Rita Spalding , partner at Webber Wentzel
These essentials range from a functioning mining cadastre system 8 , national standards 9 and legislation 10 to an overarching vision or strategy squarely focused on infrastructure development to tie all activity together .
When regulations , standards and legislation are devised , beyond their local implications , it is incumbent upon the government to
www . africanmining . co . za African Mining Publication African Mining African Mining • March 2025 • 29