By Malinne Blomberg
Exciting times are unfolding in Mauritania as the nation embarks on a transformation of its economy through mining, green hydrogen, and natural gas. President Ould Ghazouani announced plans to expand the mining industry during the presidential elections campaign held on June 29.
The African Development Bank provides insights into the sector and its implications for the Mauritanian economy.
A Promising Start
Mauritania boasts vast mineral wealth waiting to be tapped. With billions of tons of iron ore deposits, it is the second-largest producer of this vital mineral in Africa. In 2022, Mauritania produced 13 million tons of iron ore, thanks to favorable reforms and policies that attract mining activities, as reported by the Extractive Industries Transparency Initiative.
The mining sources indicate a potential doubling of this production by 2030!
Central Role of Mining in Mauritania’s Economy
The African Development Bank’s African Economic Outlook 2024 (http://apo-opa.co/3LiaJmy) projects a promising economic future for Mauritania, with real GDP growth expected to reach 4.2 percent in 2024 and 5.5 percent in 2025 – surpassing forecasts for both African and global growth.
This above-average growth is largely driven by the mining sector’s activities.
In 2023, the sector made significant strides, with Tasiast Mauritanie Limited S.A. witnessing a surge in gold production to 620.8 thousand ounces and SNIM achieving a record output level of 14.01 million tons of iron ore.
These achievements underscore the pivotal role of the extractive industries as the dynamic growth engines of the national economy.
The mining sector’s contribution to Mauritania’s GDP increased from 18 percent in 2021 to 24 percent in 2022. This growth was primarily fueled by enhanced extraction of metal ores, especially gold. The sector also significantly contributed to national revenues, accounting for around 30 percent in 2022, with SNIM, Tasiast Mauritanie Limited S.A., and Mauritanian Copper Mines leading the way.
Sector Developments and Future Plans
As the global steel production landscape evolves towards less carbon-intensive and more efficient processes, the demand for high-quality ores and DRI pellets is expected to rise. Mauritania, particularly SNIM, is well-positioned to benefit from this trend.
Over the next decade, Mauritania aims to double its iron ore production capacity to over 45 million tons per annum. This ambitious goal entails substantial investments in infrastructure and logistics with a focus on producing high-grade iron ore and developing iron ore pellets to align with the global transition to cleaner steelmaking processes.
Additionally, there are plans to progress towards the production of green steel, starting with steel pellets. The country is also eyeing the green hydrogen market to establish itself as a hub for clean energy. The synergy between mining, green hydrogen, and gas field development is set to necessitate significant infrastructure investments, benefiting not only the mining sector but the broader economy.
The Role of the African Development Bank
The African Development Bank has been a crucial partner in Mauritania’s development journey. The Bank has invested significantly in SNIM’s infrastructure, including a $46.9 million loan to expand the access channel to the mineral port of Nouadhibou, boosting iron exports and contributing to state revenues. The Bank is also actively involved in addressing the country’s energy challenges through initiatives like the Desert-to-Power project, promoting solar energy, and enhancing electricity access. The Bank’s financial support is coupled with a strong commitment to ensuring environmental and social standards compliance to ensure the sustainable and equitable sharing of mining benefits.
Green hydrogen presents a new frontier, and the Bank is providing technical assistance to develop hydrogen plans and attract private sector investments, aligning with Mauritania’s ambition to produce green steel.
During a visit to the country in 2022 (http://apo-opa.co/3xP4fs8), the President of the Bank, Dr. Akinwumi Adesina, discussed the overall cooperation between the Bank and Mauritania’s leadership.
The focus was on strengthening agricultural value chains, supporting young entrepreneurs, enhancing public financial management, ensuring water security in the face of climate change, and boosting iron ore production and processing capacities to increase the value of exportable goods.
Green Hydrogen: A Game-Changer
Mauritania is making significant strides in green hydrogen with projects like Aman, a $40 billion initiative to produce 1.7 million tons of green hydrogen and 10 million tons of green ammonia annually. This project alone could elevate Mauritania’s GDP by 50-60% by 2035.
The Nour project, another green hydrogen endeavor, has the potential to become one of the largest globally by 2030. Concurrently, SNIM and ArcelorMittal are exploring joint green steel production, positioning Mauritania as a leader in sustainable steel manufacturing.
Beyond Mining: Other Extractive Ventures
Mauritania’s natural gas reserves are substantial, with the Grand Tortue Ahmeyim gas project set to commence production by the end of 2024, followed by the Banda BirAllah gas field. Uranium mining is also on the horizon, with the Tiris project expected to kick off in 2026.
Addressing Risks and Challenges
Transparency remains a critical factor in Mauritania’s success. SNIM’s participation in the Extractive Industries Transparency Initiative ensures the equitable sharing of mining benefits. The African Development Bank Group supports Mauritania in addressing development challenges, from environmental compliance to enhancing human capital and skills development.
Maintaining security in the volatile Sahel region is essential for sustained growth. Mauritania’s stability is crucial for attracting investments and fostering inclusive growth.
As the economy heavily relies on mining exports, vulnerability to global price fluctuations underscores the need for economic diversification. Reinvesting the benefits from the expanded mining sector into the national economy, social sectors, and infrastructure is critical and will be explored in future discussions.
Conclusion: A Bright Future Ahead
With abundant natural resources and strategic investments, Mauritania is primed for significant progress. With sound policies and governance, Mauritania can realize a true transformation, leveraging its natural wealth to create a prosperous and sustainable future.
About the author
Ms. Malinne Blomberg serves as the African Development Bank Group’s Deputy Director General for North Africa and Country Manager for Tunisia, in addition to her roles as Country Manager for Libya and Mauritania.
Distributed by APO Group on behalf of the African Development Bank Group (AfDB).
About the African Development Bank Group:
The African Development Bank Group (AfDB) is Africa’s premier development finance institution, comprising the African Development Bank (AfDB), the African Development Fund (ADF), and the Nigeria Trust Fund (NTF). Operating in 44 African countries with an external office in Japan, the AfDB contributes to the economic and social progress of its 54 regional member states.
For more information: www.AfDB.org