– These are exciting times in Mauritania. This nation connecting West and North Africa is transforming its economy through mining, green hydrogen, and natural gas. During the campaign for presidential elections, held on June 29, President Ould Ghazouani announced he would scale up the mining industry if re-elected.
By Malinne Blomberg
A promising start
Mauritania is a treasure trove of untapped mineral wealth. With several billion tons of iron ore deposits, the country is the second-largest producer of this important mineral in Africa. In 2022 alone, Mauritania produced 13 million tons of iron ore, thanks to proactive reforms and attractive mining policies, according to data from the Extractive Industries Transparency Initiative. And guess what? Mining sources say they are well underway to double this by 2030!
How central is mining to Mauritania’s economy?
According to the African Development Bank’s African Economic Outlook 2024, , Mauritania’s economic future looks bright, with real GDP growth projected at 4.2 percent in 2024 and 5.5 percent in 2025 – which is above the forecasts for both African and global growth.
That above-average growth is largely thanks to the activities of the mining sector. Last year 2023 saw the sector generate many headlines.
Gold mining company Tasiast Mauritanie Limited S.A. production soared to 620.8 thousand ounces, and SNIM (Société Nationale Industrielle et Minière de Mauritanie) hit a new record output level of 14.01 million tons of iron ore.
Those figures highlight how the extractive industries are not just pillars of the national economy: they are its most dynamic engines of growth.
Overall, the mining sector’s contribution to Mauritania’s GDP shot up from 18 percent in 2021 to 24 percent in 2022. This growth was driven by increased extraction of metal ores, particularly gold. The sector also filled the national budget coffers, contributing around 30 percent of revenues in 2022. SNIM led the way, followed by Tasiast Mauritanie Limited S.A. and Mauritanian Copper Mines.
Sector developments and future plans
Globally, the steel production landscape is evolving, with a shift towards less carbon-intensive and more efficient processes. This means higher demand for high-quality ores and DRI pellets, which require less energy and produce less waste. Mauritania, particularly SNIM, is poised to capitalize on this trend.
Over the next decade, Mauritania plans to double its iron ore production capacity to more than 45 million tons per annum. This ambitious goal involves significant investments in infrastructure and logistics. The focus is on producing high-grade iron ore and developing iron ore pellets, aligning with the global shift towards cleaner steelmaking processes.
Medium to longer-term plans also include moving up the value chain to the production of green steel, initially steel pellets. However, electricity is the backbone of these industrial ambitions, and in parallel, Mauritania is also eyeing the green hydrogen market, aiming to become a hub for this clean energy source. The synergy between mining, green hydrogen, and gas field development will require substantial infrastructure, benefiting not just the mining sector but the broader economy.
The African Development Bank’s role
The African Development Bank has been a key partner in Mauritania’s journey. The bank has invested heavily in SNIM’s infrastructure, including a $46.9 million loan to widen the access channel to the mineral port of Nouadhibou. This has boosted iron exports and contributed to state revenues. The bank is also contributing to addressing the energy challenge through initiatives like the Desert-to-Power project, promoting solar energy and improving access to electricity. The bank’s financial support goes hand in hand with a strong commitment to the country’s compliance with environmental and social standards. This ensures that the benefits of mining are shared widely and sustainably.
Green hydrogen is another exciting frontier. The bank is providing technical assistance to develop hydrogen plans and attract private sector investments. This aligns perfectly with Mauritania’s goal to produce green steel, adding value to its mining sector.
On a visit to the country in 2022, the president of the bank, Dr Akinwumi Adesina reviewed with national leadership the overall cooperation between the two parties.
They focused on strengthening the integration of agricultural value chains, supporting young entrepreneurs, strengthening public financial management, ensuring water security in the face of climate change in addition to enhancing the production and processing capacities of iron ore to increase the added value of exportable goods, and.
Green Hydrogen: The game changer
Speaking of green hydrogen, Mauritania is making bold moves. The Aman project, a $40 billion venture, aims to produce 1.7 million tons of green hydrogen and 10 million tons of green ammonia annually. This project alone could boost Mauritania’s GDP by 50-60 percent by 2035.
The Nour project, another green hydrogen initiative, has the potential to be one of the largest globally by 2030. Meanwhile, SNIM and ArcelorMittal are exploring the joint production of green steel, which would position Mauritania as a leader in sustainable steel production.
Beyond mining: Other extractive projects
Mauritania’s natural gas reserves are also impressive. The Grand Tortue Ahmeyim gas project is set to start production by the end of 2024, with the Banda BirAllah gas field following close behind. Uranium mining is also on the horizon, with the Tiris project expected to kick off in 2026.
Navigating risks and challenges
Transparency is key to Mauritania’s success. SNIM’s involvement in the Extractive Industries Transparency Initiative demonstrates that the benefits of mining are shared equitably. The African Development Bank Group supports Mauritania in addressing development challenges, from environmental compliance to strengthening human capital and skills development.
Security in the volatile Sahel region is crucial for sustained growth. Mauritania has managed to remain stable, an essential factor for attracting investment and fostering inclusive growth.
With great power comes great responsibility. The heavy reliance on mining exports makes the economy vulnerable to global price fluctuations, highlighting the need to also diversify the economy. The benefits of the scaled-up mining sector will need to be ploughed back into the national economy, into social sectors and enabling infrastructure, and that will be the topic of another blog.
Conclusion: A bright future ahead
With its rich natural resources and strategic investments, Mauritania is poised to leap forward. With good policies and governance, Mauritania can achieve a true transformation, harnessing its natural wealth to build a prosperous and sustainable future.
