Recent experiences in Southern Africa point to mining taxation’s limited capacity to fund national development strategies. State mineral revenues have been undercut by the confluence of several factors, including the tendency by governments to conceded tax bargains demanded by companies in order to secure new investments; the uneven technical capacities of public institutions, particularly in the face of under-funding due to systematic tax evasion; the volatility of international commodity prices; and the rapidly shifting practices, codes and restrictions around the enforcement of mining contracts. At the same time, uneven access to the state has diminished the influence of both domestic miners and local mining service sector business in shaping mining fiscal regimes. Social policy activists have sought with limited success to link resource taxation with strengthened social provisioning; for example, public health specialists have identified risks associated with mining and called for fiscal strategies to improve public health outcomes in mining communities and at national level.

More broadly, debates on mining taxation in Africa in the context of critical minerals and the Green Transition have tended to focus until recently on environmental, climate change or narrower revenue effects, with a lesser focus on critical issues of social redistribution, provisioning and the strengthening of state capacities. There are increasing calls within Africa for a greater focus on the question of a “just transition”, and what this might entail in terms of national extractive strategies and, particularly, national and regional mining fiscal regimes.

The cluster’s work will address research gaps in three critical fiscal policy areas: state taxation and planning capacities in the critical minerals sector and options for their strengthening; emerging opportunities and strategies for social provisioning which link critical minerals to social services funding, and notably public health provisioning and social and environmental risks management; and strategies for strengthening stakeholder participation – including miners and the mining services sector, communities and social justice advocacy organizations – in taxation reform, implementation and mechanisms enabling continuing spending oversight related to extractives revenues and earmarked taxes.

This research will have an important comparative component, given that the four countries’ fiscal regimes, taxation institutions and international contractual obligations are subjected to similar conditions demanded by transnational mining capital, international development agencies and bilateral donors. The problematic experiences in several countries of implementing the fiscal recommendations of the AMV and other regional taxation harmonization initiatives, underscore the value of a regional approach to understanding the constraints on mining taxation initiatives in Southern Africa. A critical innovation of the cluster’s work will be the targeted inclusion of diverse domestic stakeholders’ perspectives in its mapping of the social and economic interests who are insisting on a greater say in current taxation reform processes.

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National and Regional Value Chains

• Mineral processing and beneficiation of CMs (e.g. EV battery agreement between Zambia and DRC, and its spillover into other industries)
• ‘Local Content’ utilised in the extraction of ‘critical minerals’; technologies, Inputs, Services, Intermediate goods, skills, etc.

Industrial policy recalibration involving CM extraction

• Issues of labour, mining-affected community and other social inclusion in evidence generation, policy formulation and implementation
• Trade-offs and alternatives in new policy strategies (e.g. health, environment, ESG)

Transportation Corridors enabling the export of CMs to global markets

• Mapping of diverse Interests (multilateral/bilateral donors, governments, etc)
• Investment and technical assistance: geopolitical rivalries and implications
• Tracking strategies for incorporating secondary industrial spillovers in transportation corridors beyond the export of CMs

Energy infrastructure implications for CMs extraction

• Trade-off strategies and implications: using coal/LNG for mineral extraction processes to feed a global green transition
• Mining consumption implications for national/regional economies
• Potential ESG demands on energy for extractive purposes
• Options and contestations around renewables/CM extraction strategies