The Cotonou EU-ACP partnership agreement signed on June 23 has buried Sysmin. The consequences for Africa are bleak. Francois Misser reports.
The EU's special instrument to support the mining sector of the African, Caribbean and Pacific (ACP) group of countries has been killed. But before the funeral, an unspent tranche of Euro465m must still be shared out among 12 countries, including nine African states.
Once this package is spent, ACP mining countries, hit by low international mineral prices, cannot expect further compensation from the EU.
The Sysmin was born in 1980. Its official raison d'etre was to help ACP countries to preserve their mining production capacity in the event of a fall in world prices. Over time, the instrument which was activated by criteria such as the dependency ratio of mining exports and falling world prices, was improved in several ways.
Gold, which was at first excluded from the system, was included in 1990. Eventually, Sysmin also played a part in helping ACP mining sectors diversify their product lines or to diversify ACP economies away from the mining sector.
Cold War dynamics
Some of the largest African parastatals such as Zambia Consolidated Copper Mines and Congo's Gecamines benefited from Sysmin loans and grants. Both the industry and ACP countries complained often about lengthy procedures, but no one questioned the relevance of the system until the end of the Cold War.
Then, abruptly, ACP mining products lost their strategic interest for the EU. At the same time, the EU came under pressure from the Bretton Woods Institutions to drop subsidies to the ACP mines. By the year 2000, Sysmin had become a complete heresy for the globalisation ayatollahs.
However, 12 ACP states, including nine African nations are still entitled to a tranche. Totalling Euro465m, African states to benefit from this fund include Zambia, Zimbabwe, Mauritania, Niger, Gabon, Senegal, Ghana, Namibia and Botswana.
Projects for which funds are likely to be secured include: A Euro30m programme aimed at encouraging the diversification of the Zambian mining sector out of the traditional copper and cobalt industry.
Consultants are expected to provide five years of technical assistance to the Geological Survey Department. The idea is to help small-scale miners involved in the production of precious stones who at present are unable to prepare feasibility studies to obtain risk capital from commercial banks and improve-marketing skills.