Africa’s Mineral Wealth May Just have to Stay in the Ground to Protect a Changing Climate

The extraction of natural resources across Africa, including
minerals like gold, is being affected by a changing climate.
Credit: Busani Bafana/IPS

By Busani Bafana
BULAWAYO, Zimbabwe, Oct 7 2019 (IPS)

As a result of climate change, resource extraction industries in
Africa will be impacted by asset stranding, researchers say.

“Stranding implies that several natural assets are going to
become commercially unviable around the world as a result of
climate change and the inability of countries to exploit them,”
said Vanessa Ushie, manager of the policy analysis division at the
African Natural Resources Centre of the African Development Bank (AfDB), which
supports African countries to leverage their natural resources for
sustainable development.

Ushie told IPS stranding is an increasingly important policy
issue that African countries should consider because they are
highly dependent on natural resources, with an average 70 percent
of their exports being minerals.

As the content struggles to reach its Sustainable Development
Goals (SDGs), a set of global goals identified by the United
Nations to end poverty and inequality among member states, a wealth
of natural resources that could be used for Africa’s development
remain  largely untapped.

  • Some 30 percent of the world’s mineral reserves including
    platinum, gold, diamonds and coal are found in Africa, yet the
    continent still has high levels of poverty. 
  • Africa also has 10 percent of the world’s oil reserves and 8
    percent of natural gas, according to the African Development
    Bank.
  • Climate change is threatening the exploitation of these
    resources and more importantly of the non-renewable energy sources;
    coal, oil and gas.

Keep them in the ground

As a result of the impact of climate change, Africa has
difficult options when it comes to its mineral resources,
researchers say. Can it keep the resources in the ground and risk
economic stagnation or find profitability in clean energy
sources?

“We are aware of the Paris Agreement and the commitment of
African countries, just like their global counterparts, to reduce
carbon emissions in order to meet the target of keeping global
warming below 2°Celsius,” Ushie said. “With that warming
target, it is clear that certain minerals will have to be left
below the ground especially those that emit the highest carbon into
the atmosphere.”

  • The AfDB says “stranded assets” have in recent years
    attracted a lot of interest, as climate-driven changes justify a
    shift to low-carbon development in the natural resources sector.
    More than 185 countries have agreed to leave two-thirds of proven
    fossil fuels in the ground to meet the Paris Agreement climate
    target.
  • In 2017, the International Energy Agency warned that oil and
    gas assets worth 1.3 trillion dollars could be left stranded by
    2050, if the fossil fuel industry does not adapt to greener climate
    policies.

Speaking at the end of the United Nations Climate Summit
recently, Nobel Peace Prize laureate and former president of
Ireland, Mary Robinson, said world leaders should act on the
outrage of millions of people around the world who marched against
climate change and calling for and end to the use of fossil
fuels.

“We urge all nations to commit to achieving carbon neutrality
before 2050 to immediately end construction of, and investment in,
coal power and to implement a green transition that is just and
equitable,” Robinson said.

Stranded assets

But many African countries are extracting coal, gas and oil with
new discoveries, signalling future fortunes that could be difficult
to forfeit.

  • In 2019, French oil firm Total made public its discovery of a
    large “gas condensate” in South Africa. The gas condensate –
    effectively a liquid form of natural gas – is a more prized than
    crude oil.
  • In Kenya, British oil company Tullow Oil projected 2024 as the
    earliest likely date by which the country can expect gains from its
    Turkana oil. Vast oil reserves have also been discovered in
    Uganda.

For the African continent, a latecomer to the fossil fuel boom,
arguments for asset stranding could influence development gains and
also interrupt economic growth.

Ushie said some assets will be stranded due to changes in
markets and investment flows, as global extractive companies and
investors adjust their portfolios to meet new, low-carbon
regulations. Other extractive assets are at risk due to changing
consumer demand, such as the growing use of solar energy and
electric vehicles in developed countries.

An opportunity or obstacle?

“With growing climate change and the ensuing low-carbon
transition, Africa’s mining sector faces serious risks, and some
opportunities,” Ushie told IPS, noting that African countries
need to understand and respond to the new normal.

The AfDB is promoting a diversified approach to energy provision
and integrated natural resource management.  The solution lies in
investing in localised and resource-efficient energy options like
decentralised, community-owned local solar, wind and biomass
projects.

By 2020, the Bank will have contributed $17 billion to climate
finance for African since it developed a funding mechanism through
its Climate Change Action Plan. Besides, the Bank’s Africa NDC
Hub has supported African countries to implement their Nationally
Determined Contributions (NDCs) under the Paris Agreement and
helping countries attract sustainable financing opportunities such
as green bonds to support climate change adaptation in high risk
countries.

Research evidence for low carbon policies

“We want to model scenarios under which stranding could occur
for various minerals and fossil fuels, and provide policy advice to
governments on how they could respond to this risk,” said Ushie.
“There should be a robust public debate on stranded mineral
assets and resources, and this is why the AfDB is engaged in policy
platforms such as the Inter-Governmental Forum on Mining, Metals
and Sustainable Development.”

The Intergovernmental Forum
on Mining, Minerals, Metals and Sustainable Development
to be
held in Geneva, Oct. 7-11 , has the theme; “Mining in a changing
climate’”, indicating that even at a global level, there is
recognition that resource extraction is being impacted by climate
change.

The forum is a good opportunity for the Centre and the Bank to
be engaged in global policy dialogue on the future of mining, which
is a critical industry in Africa, she said.

Fatima Denton, Director of the U.N. University’s Institute for Natural
Resource
, told IPS the global shift from fossil fuels and the
drop-in technology costs of renewables are an opportunity for the
African continent to increase investment in green energy
sources.

With rapid urbanisation of most African economies, coupled with
a rising demand for electricity, African nations have begun taking
advantage of this opportunity to increase investment in renewables,
Denton said.

A 2018 study by Bloomberg Finance indicates that developing
countries are beginning to lead the global clean power transition.
A total 114GW zero-carbon power capacity was added in developing
countries in 2017 compared to 63GW added in wealthier nations.

With the drop in global gas prices, more African nations were
focusing on growing their gas economies. Renewables have greater
need for metals and materials, creating opportunities for African
countries with reserves of these resources essential to the
construction of wind, solar, electricity transmission.

“Despite the opportunities mentioned above there is the
challenge of when African economies will actually strand their
fossil fuel assets and the lack of funding to invest in green
growth opportunities as stated in their NDC’s,” Denton
said.

Energy security in a low carbon future entails transition
towards clean renewable sources, not as an end in itself, but as a
means to achieving sustainable development in critical sectors such
as agriculture, mining, health and education, said Denton.

The post
Africa’s Mineral Wealth May Just have to Stay in the Ground to
Protect a Changing Climate
appeared first on Inter Press Service.

Source: FS – All – Ecology – News
Africa’s Mineral Wealth May Just have to Stay in the Ground to Protect a Changing Climate