South Africa needs developmental space during energy transition: president
South African President Cyril Ramaphosa on Tuesday said the country, like all developing economies, has to be given the necessary developmental space as it takes an energy transition amid energy insecurity.
As South Africa is exploring opportunities of the global energy transition and moving to future strategic metals such as copper, nickel, cobalt, and rare earths, as well as eyeing on platinum group metals and hydrogen economy, it must continue to expand the production of some of the minerals that have been the “mainstay” of its mining industry, which still have much demand, Ramaphosa told Investing in African Mining Indaba taking place in Cape Town.
It is critical that the country’s efforts for a low-carbon future are both realistic and sustainable, he said, adding that African countries “need to be able to explore and extract oil and gas in an environmentally-responsible and sustainable manner”, as they are important for energy security, social and economic development and reducing energy poverty.
“It is important that as we undertake a just energy transition, we adhere to the principle contained in the UN Framework Convention on Climate Change of common, but differentiated responsibilities and respective capabilities,” he said, noting the importance of improving working and living conditions of mineworkers and mining communities.
South Africa’s mining industry registered a growth of 11.8 percent in 2021, the highest across all industries, and recovered production to almost pre-COVID levels last year, official figures showed.
Investing in African Mining Indaba, which was said to be the largest African mining investment event, attracted thousands of attendees from governments, mining groups and relevant players. ■
The African Energy Chamber (AEC) is proud to announce the participation of the African Energy Investment Corporation (AEICORP) at Africa’s leading investment platform for the oil and gas sector, African Energy Week (AEW) (AECWeek.com) , taking place on 18 – 21 October 2022 in Cape Town, South Africa.
AEICORP’s experience in financial advisory and capital raising, policy and technical assistance and project development will be vital at AEW 2022 as the conference moves to reshape dialogue around boosting oil and gas investments across Africa. Leading the AEICORP delegation, Director Zakaria Dosso will be participating in panel discussions and high-level meetings which center around the role fiscal and policy reforms play in helping Africa to attract investments within its high potential hydrocarbons market.
AEICORP was established in January 2019 by the African Petroleum Producers’ Organization in response to investment declines regarding oil and gas exploration and production. According to the AEC’s Q1 2022 Outlook, The State of African Energy, Africa’s oil and gas sector recorded a decline in capital expenditure from $60 billion in 2014 to $22.5 billion in 2020 due to factors such political instability, lack of adequate infrastructure and regulatory uncertainty. Additionally, the COVID-19 pandemic further reduced foreign direct investment (FDI) across Africa’s oil and gas sector with investors withdrawing up to $83 billion in investment from Africa in 2020, according to the International Monetary Fund, and oil companies delaying project rollouts.
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In addition, new investment regulations which are driven by global climate policies have made it difficult for Africa to attract funding to boost oil and gas exploration and production. In 2021 alone, these policies saw west Africa’s oil and gas sector recording a 21% decline in FDI to $11 billion. As a result, Africa’s hydrocarbon production has also dropped. According to the United Nations Conference on Trade and Development, oil production across the continent has declined from representing over 12% of the globe’s total crude oil output at the end of the last decade to approximately 9% in 2022.
Africa needs to prioritize the exploitation of oil and gas while diversifying the energy mix with renewables
However, as Africa seeks to boost the production, utilization and monetization of its hydrocarbon resources, institutions like AEICORP are expected to play a vital role. Efforts by AEICORP to invest $7.65 billion, attract $12 billion in FDI and create over 800,000 jobs over a period of five years will play a significant role in helping Africa to address investment barriers.