Glencore is waiting for commodity prices to pick up again before resuming production, which was halted last month, at its African mines. Speaking at the Financial Times Africa Summit, Glencore CEO Ivan Glasenberg discussed its company strategy in relation to the falling commodity prices. “If you are not making money, I believe you should stop production and take out supply,” he said, adding that there was “no point” in extracting the metal without making a profitable margin. Glasenberg expects to withdraw approximately 400,000 tonnes of copper from the market in the next 18 months, during which time the company will keep investing in the mines’ construction in preparation for when the price picks up.
Delegates at the summit suggested this was a perfect time for African governments to focus on reforms and economic diversification. Vera Songwe, Western and Central Africa director at the International Finance Corporation (IFC), said that at least 20 African countries stood to benefit from lower oil prices and opening up to reforms to diversify the economy. “Countries that have diversified their economies have weathered the commodities shock better,” she said, reminding delegates of the importance of the agricultural sector for trade and job creation. Her remarks were echoed by Wale Tinubu, group chief executive at Oando, a private energy company based in Nigeria, according to whom low commodity prices open up business and job opportunities. He also supported reforms in the area of economic diversification, privatisation and liberalisation because “everything that works in Nigeria is privatised”, he said.
“The drop in oil price has been fantastic for us,” agreed Amy Jadeismi, managing director of Lagos Deep Offshore Logistics Base (LADOL), an industrial village and specialised port facility. “Now that the price has fallen and we have good corporate governance, LADOL is already getting an increasing number of proposals and our business is thriving,” she said.
Donald Kaberuka, former African Development Bank president, also dismissed the significance of commodity prices for Africa’s development: “There are more important things to fix in Africa than commodities, like energy, infrastructure, security,” he said.