IN THE STOPE
South African’s get a foot in the door first
and take advantage of our proximity and our
knowledge of other African markets. The free
trade agreement is a great opportunity for
South Africa, particularly in West Africa, where
there is a burgeoning mining industry and a
boom in construction.
In your experience, are South African
companies expanding their footprint into the
rest of Africa?
They are, but close to 85% of that expansion is
purely into the Southern African Development
Community (SADC) and especially into
SACU and countries like Zimbabwe, Zambia,
Malawi, Mozambique and the southern parts
of the Democratic Republic of the Congo. It
is proof that where South African companies
do have preferential access, they do well. But
we remain most competitive and thrive in
countries close to us, where our products are
well suited and well accepted, but outside of
the immediate neighbours we don’t have a
particularly strong footprint.
Are we still regarded as the gateway into
Africa?
This idea that South Africa is the gateway into
Africa is totally wrong. We might be the gateway
into Southern Africa (excluding Angola) but
Nigeria is the gateway into West Africa, while
Ghana and Côte d'Ivoire can be regarded as
gateways into certain other hubs of influence in
West Africa. Kenya is the gateway to East Africa,
excluding Ethiopia and Cameroon the entry
point into Central Africa.
There are several African economies that
are growing at phenomenal rates. Which
African country, in your view, offers South
African suppliers the most opportunities at the
moment?
Apart from the international space station,
the Liquefied Natural Gas (LNG) project in the
Rovuma Basin of Mozambique is the biggest
investment in the world. Final Investment
Decision (FID) on two of the three key projects
have already been declared – and that is about
USD30-billion worth of business – while there is
another USD25-billion to USD30-billion which
will reach FID in the first half of 2020. So, in total,
that is about USD60-billion to USD65-billion
worth of FID. These projects were long in the
making. A lot of South African companies rushed
up to Pemba and Palma in early 2010’s waiting
for FID, which didn’t happen, they got their
fingers burnt, and had to come back, and now
they are reluctant to do it again.
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African Mining Publication
Their Italian competitors, on the other hand,
didn’t pack up and go home, they waited and did
something else in the meantime. The province
of Cabo Delgado is the epicentre of the gas
development. Over the next decade, estimates
are that about USD128-billion will be invested
in that province, just in the gas sector. The
Duncan Bonnett, partner and director at
Africa House.
African Mining
African Mining March 2020
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