Comment
Mining remains a sunrise industry in Africa
T
Get in touch
Leon Louw - Editor
@LeonLouw3
[email protected]
he mood at this year’s
Investing in African Mining
Indaba, held at the Cape Town
International Convention
Centre (ICC) in South Africa
from 4 to 7 February, was decidedly more
upbeat than that of the past few years, and
delegates in general felt more optimistic
about the future of the industry on the
continent. South Africa, of course, was a big
focus, and although a multitude of delegates
was as hopeful as South African Minister of
Mineral Resources Gwede Mantashe on the
first day, niggling questions about the future
of a once-thriving industry lingered after
Mantashe’s keynote address was delivered.
Mantashe has been a boon for mining in
South Africa, but his encouraging words fell
short of pacifying fidgety investors. We need
to realise that one speech at a global event
doesn’t give foreign capital enough comfort
to make long-term commitments. And that
not only applies to South Africa but to the
rest of the continent as well.
Direct foreign investment needs stability
and certainty — something many African
countries fall short of guaranteeing. Despite
many improvements, Africa remains a high-
risk mining destination and presents several
challenges. According to several speakers
at this year’s Indaba, political instability
and regulatory uncertainty often hamper
investments into Africa. To enter African
countries, companies need a strategy that
includes an in-depth risk assessment as
well as local support and knowledge. Junior
exploration projects often fail because
the companies do not have a genuine
understanding of local operating conditions.
Sourcing accurate information about
African countries, its political and economic
landscape, and its operational challenges, is
vital. Investing in African countries and fragile
states remains a risky undertaking, but the
rewards are extremely high.
Community development, social and
environmental issues, gender equality, and
transformation dominated the agenda at this
year’s Indaba.
Although mining will continue to drive
economic growth in Africa, it will have to do
so in partnership with local communities and
www.africanmining.co.za
by transforming the workforce, with strong
emphasis on female representation. This was
the message most speakers at the Indaba
brought to delegates representing the mining
industry from across the globe.
According to Cyril Ramaphosa, president of
South Africa, who addressed delegates on
the second day, mining is a sunrise industry
— and not a sunset industry, as many
detractors would like to believe. Ramaphosa
emphasised the importance of mining, but at
the same time warned that its growth should
be inclusive and benefit the countries and
local communities in the area of operation.
Ghana’s president, Nana Akufo-Addo, who
preceded Ramaphosa’s speech, pledged
government support for mining companies
and referred to the recent re-opening of
AngloGold Ashanti’s Obuasi mine as a good
example of what can be achieved if there is
a common goal. Ghana’s government had to
intervene at Obuasi when artisanal miners
took control of operations a few years ago,
which resulted in environmental degradation
and pollution.
As more junior mining companies target Africa,
the message at Indaba was loud and clear:
please come, but operate in a responsible and
transparent way, and to the benefit, and not the
detriment, of communities and the environment
— or face the consequences.
As commodity prices further strengthen and
profit margins increase, established mining
companies and junior exploration companies
are once again looking to Africa to diversify
their portfolios. Several junior exploration
companies were represented in Cape Town,
with gold projects in West Africa and the
development of battery minerals throughout
the continent dominating the exploration
space. Big players like Barrick Gold,
AngloGold Ashanti, Rio Tinto, and B2Gold
are looking at expansion and/or exploration
to further strengthen their position on the
continent. This all bodes well for the industry
in 2019.
Leon
Editor
MARCH - APRIL 2019 AFRICAN MINING
1